Family businesses are the worst businesses. Infighting and dad-liked-you-best resentments can ruin a solid business model. However, family businesses are also the best businesses. 

This column is for the fathers and sons who work together. And fathers and daughters. And mothers and brothers and sisters and cousins. Family business is always a bit kooky. But, when it works, family business is a beautiful thing. It provides purpose and value to the family, and to the families who are connected as employees, vendors, subcontractors and customers. When it works, family business leverages love and trust into better communication and a shared intention to create a legacy.

So, what does it look like when it works?

Tips for building a winning family business

Put a little plan together. You knew I was going to say that, right? Clarify your mission, values and goals. It can be a one-pager. It could be a vision board. Just make sure you are on the same page. Decide what kind of business, and family, you want to be.

Establish the organizational chart. I recommend that you determine a president or CEO. The best businesses have a clear chain of command, departments, positions and career paths. Even if the ownership is divided equally, consider electing one person to the be the buck-stops-here person. And/or you can have a voting protocol built into your corporate operating agreement.

Create position descriptions. Make short bulleted lists of what needs to be done in each position.

Formalize procedures and training. Document how to do the responsibilities for each position description. Write the checklists, and use them for your training curriculum. Drill the checklists with the team — everyone, including family members — and help people get good.

Have family members work their way through every position. Note that family members can help write the position descriptions and manuals as they move throughout the org chart. This develops empathy and street cred. I learned this training technique when I was promoted to manager at a restaurant chain. It helped me develop respect for the dishwashing position, I’ll tell you that! Family members don’t have to be the best at each position, but they should be willing to do every job.

Explore family member opportunities outside the company. Encourage, or require, college courses, seminars, technical training and apprenticeships at other companies.

Have an exit strategy. My sage friend, Al Levi, refers to the Ds that change everything. Death. Disaster. Divorce. Debt. Disability. These events can destroy your business. However, if you are willing to have the tough conversations now, you can survive these devastating, yet ultimately unavoidable life-changers. The best businesses have buy-sell agreements and key-man insurance policies in place.

Hold all team members accountable. The best businesses let people go, those who are not willing or capable of being successful in the company. Even family members. Follow strict and fair Progressive Correction protocol.

Recognize good performance and displays of character. So often family members are super tough on each other. Be generous with feedback and praise.

And now for some “motherly advice”

Dear children, you don’t have to follow your parents into the family business. Don’t feel compelled to buy the company from them. You get to do what you want. Parents, the same goes for you. You don’t have to “save” the business for the kids if a great offer to sell comes along.  You get to do what you want. Be willing to explore that. That will keep you from trying to get someone else to make your dreams come true for you. This “laying on” of hopes and aspirations is what makes so many family businesses weird.

Should you decide you want to work together, consider a meritocracy, a distribution of power based on ability, skills and production. As opposed to a monarchy where bloodlines rule and actual work is not required. In other words, offer family members an opportunity — not a guarantee. Then, should the above-mentioned systems be in place, one could earn their way up the career ladder.

No business is perfect, and you can always make yours better. Even more important than these practical tips are the relationships between the family members. Love is the caulk that holds you together while you fix the fixable stuff. The best businesses, and families, are grounded in love.

Which brings me to my friends, Tony and Nick.

“Every day I see a little more of my father in me.” – Keith Urban

Tony and Nick Favorito – EnviroSafe Inc. – Pittsgrove, New Jersey

Nick is 32 years old. He joined forces with his dad, Tony, four years ago. They offer plumbing, HVAC and water-conditioning services in “South Jersey.” Nick is a smart fellow, with an MBA, a degree in bio-medical engineering and a lot of ambition. Tony started the business 38 years ago, and is a Master Plumber by every definition of the word.

I visited their shop recently. They have big dreams, and there is some organizational work to be done for them to reach their goals. But the very cool thing about Nick and Tony is that they openly like and love each other. The energy in their shop is positive and contagious.

I asked them, “How do you work together so well?”

Nick says: “We have a lot of respect for each other. We have different strengths, and so we’ve split our management duties accordingly. Tony manages the field team and vehicles. I oversee administration, finance and marketing. We have our roles. Even so, we sometimes get in each other’s way. Then, we will talk it out.

Occasionally my dad will say, ‘Nick, I’ve been doing it this way forever.’ I will press him, ‘Can we do better?’ I had a new approach to truck stock, and he wasn’t buying it. He didn’t see the need for the level of detail I was proposing. I said, ‘Dad, you know where every single part is.  You could find the needle in a haystack. The rest of the guys are not like you. They need a better system.’ He is willing to change his mind. So am I. We don’t get hung up on being ‘right.’   

My dad is more than a mentor, more than a boss. He is my hero. He is a life-long learner, and he instilled that in me. I don’t like to lose. That comes from my dad. We are both very competitive. We don’t quit — we find a way to make it happen. The stuff that really matters, I learned from my dad.”

Tony says:  “Sometimes, our discussion leads to new and even better ideas. I like to keep an open mind, and I want Nick, and our employees, to feel free to share their thoughts with me, even if they think I may not agree.    

It can be hard to let go, especially if the way we do something has been successful. However, you have to change with the times. I appreciate Nick’s energy and forward-thinking. We are excited to be working together.

“My advice to other family business owners would be to talk to each other. Don’t bother with being offended. Be willing to say, ‘Let’s give it a try.’ At the end of the day, it’s our relationships that matter. Family comes first.”

The best family businesses are grounded in love.

NOTE: There is a lot more to discuss regarding family business. Stay tuned — I’ll address in future columns! And be sure to send me your thoughts and tips to ellen@ellenrohr.com!