Why family business planning should focus on family rather than business.
The complex nature surrounding the family business makes it a special organization because the three elements that compose it. The business, family and ownership create a unique value to these businesses, and in recent years researchers have given this area greater emphasis on analysing these organizations to understand the behavior they have.
Like any business, family businesses have or should have a business plan that will help with the management and business growth. However, family business planning should take greater focus in the family aspect, rather than in business or ownership. I don’t say that business is not important, it is, but there are more critical aspects that surround family.
Here I explain why.
1. Human relationships are emotional, numbers are rational.
If business is going well, it will tell you with revenues and profits, and if business is going bad, it will tell you with the losses you have. It is a simple equation of two outputs. However, in a family business you have to interact with the values, thoughts, ideologies and feelings of family members. Family Business theory says to put aside feelings and just concentrate on the business when you are inside, and vice versa when you are at home. But what really happens is that many families involved all, so owners must be smart to control and avoid emotional situations that impact the business.
2. Families can grow faster than the company.
The family needs for food, housing, transport, school, new births and new members joining the family, become more important than other things. If the company is not economically strong to solve the income issues for the family, then the family should plan how they could generate money from outside the company, or whate they should do to grow the company. Often, family business owners have the misconception that the business cash flow is the family cash flow, which this could lead them to bad financial management practices. Owners must plan correctly, and separate the business and family expenses.
3. The family harmony can boost company growth.
If there are fights and divisions between the family who are working within the business, this can cause difficulties or even more problems to make the job done correctly. Prioritizing family harmony in the family business plan could help members to seek a way to create a team with proper job roles with established goals. Undoubtedly, it is easier to work in a healthy work and home environment.