3 Things Families Have in Common with Businesses

Think about your family. There are grandparents, children, nieces, nephews, uncles, aunts, parents, and cousins. It’s a noisy, joyful, sometimes difficult to manage group of people who are tied together by love, and a shared history and bloodline. In a similar way, the people in a business are also bound together by a common cause. In fact, families and business share many things in common.

Here are three things that families and businesses have in common:

1. They Need Diversity

Imagine that you’re fighting with your sister. The argument is so heated you’re not even sure how to move forward. So, what do you do? You look for someone who can provide an outside perspective. In order to thrive, families often need the help of a mediator or a neutral third party who can help family members work through complex issues. Also, sometimes you simply need a break from your family!

In business, diversity is also essential for long term success. It’s through diversity of employees that you’ll boost the level of innovation in your company. Remember, even if you have a family business, taking care of your non-family member employees is essential. In fact, up to 80% of employees in family firms are not family members.

Family businesses should set up practices and procedures that include, motivate, and encourage these non-family employees. Remember to avoid showing favoritism to family members in the business. Favoritism and entitlement can de-motivate and discourage non-family members because they feel they aren’t being treated fairly. Instead, all employees should be held to the same standards and offered opportunities in a structured way. 

2. Finances Must Be Managed Carefully

The success and long term security of a family is dependent on its ability to manage finances effectively. What’s tucked away in one pocket for food can’t be spent on an expensive vacation! Instead, there must be a plan for money, a budget, to which all family members adhere.

The same is true in business. That’s why businesses also need clear budgets. In family businesses, it’s essential that families keep their personal and business finances separate. Grabbing extra cash from the business to spend on personal expenses is a quick way to send a company into ruin. Instead, a fixed salary should be given to family members in the business.

3. You Need a Plan for the Future

In families, planning for the future involves many elements. Care for aging family members, the education of children, and being prepared for an unexpected expense or emergency are just a few common concerns families have. However, through discussions and financial planning, families can make sure they are prepared for the future, whatever it may bring.

In a similar way, businesses also need to plan for the future. They must put plans together related to succession and changing leadership, save money for emergencies and unexpected expenses, and set goals. Ideally, businesses also plan ongoing professional development for their staff. 
These similarities between families and businesses can help open up your eyes to the needs your family or business may have. Think of your family as a business or of your business as a family for a change in perspective. A new perspective can be all it takes to help you make positive changes that will set up your family, business, or family business for success!

Follow Elaine King, bilingual financial adviser and international expert in family business, on Facebook, Youtube, Instagram and Twitter.