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  • Writer's pictureTsitsi Mutendi


The success or failure of a family business depends on factors that go beyond the relationship between family members, it depends fundamentally on administration, management, and knowing how to separate family life from business. Although having a close family does not guarantee success, if it is conflictive, it will make you more vulnerable.

The seed of the family business is born from the same common core of parents and children.

All companies, small, medium, and large are like trees. They arose from a seed (idea) that, once planted, required water and fertilizer (resources), and different special care (work).

Over time a plant arose that grew until it gave shade, fruits (profits), and more seeds to plant more trees.

Likewise, the seed of the family business is born from the same family nucleus, which becomes the engine to embark on the journey.

Within the route to follow there will be potholes, bumps, and a wide variety of obstacles that we must be prepared for and overcome successfully; It is very important to be prepared to follow a series of steps before continuing on the same path that we have followed for years, which will be essential to minimize the risks of failure and ensure that the results are obtained.

One of the strengths of family businesses is precisely the bond that unites them and leads them to work as a team and seek the well-being of all, not just some. In order to take advantage of this point, it is important to be willing as a family to develop strategies that define what is sought to be achieved, taking into account the knowledge of each member.

Being a family business does not necessarily mean that family members have greater benefits and empowerment than other employees; being family should not secure a job with the company.

It is important that family members allow company managers to carry out their work with autonomy and without interfering in their function.

First step: Frontiers in the family business

There are borders that divide the family business into circles of influence, and circles of interaction, which, when identified and formalized, will allow the initiation of an institutionalization process since this implies that the reality in which they find themselves is being accepted and therefore the responsibilities, obligations, and rights that correspond to them.

These circles refer to the following:

  • Family – Blood ties

  • Ownership – Shareholders

  • Company – Functions performed within the company: employee or director.

It is important to take into account in this step that it is not correct that by trying to solve a family problem, customers, suppliers, and employees are harmed.

Just as neither, to solve a conflict in the institution, annoy a family problem.

Second step: Define and accept reality

It is not enough to define in which circle we find ourselves standing, but also the ground that as a person, company, and family we are cementing.

At this point, it is suggested to carry out a SWOT for each of the three mentioned areas, which allows us to know both the internal and external factors that are benefiting or affecting us, in order to take action from them and form a strategic plan of where to go. We want to get there and how we will do it.

In this aspect, common objectives and values ​​between the person, company, and family must be taken into account, since this will be the basis of the strategy to be followed.

Third step: Desire does not ensure the result

Defining the reality that we want to reach is at first sight a desire, which will require a decision on the part of the founder of the initiative to generate the change, and then generate the strategic plan, which must be kept not only in writing but also in the reality crystallize it with its implementation, which will be monitored and evaluated to ensure its operation and its contribution towards the achievement of objectives; If the plan is not being efficient, the necessary changes should be suggested.

Finally, the commitment of partners, family members, and collaborators to remain united is required, to maintain both joint economic power and business and family harmony.

Fourth step: Communication

First of all, the founders, who tend to be the leaders of the company and the family, must have an open dialogue with their families and collaborators.

It is suggested to carry out a periodic flow of information with the shareholders or partners, family, board of directors, and key officials, where the plans and progress are made known to them, in order to promote the support and contribution from the owners. , directors and employees.

Step Five: Rules of the Game

It is imperative to set the rules of the game in writing and by mutual agreement, in a document such as a family protocol.

Often, each of the children has different objectives: while one wants to expand the business, another wants to change its line of business, a third sells it, etc.

For this reason, it is important that the leader meets with his family and preferably with an adviser to define the family statutes in relation to the company.

This document will define, among other things: the way in which the company will be guided in terms of fair remuneration for family employees, the policies for the incorporation of said members into the company, and marriage agreements, among others.

The agreement will be made known to the family and will be like the axis on which the management of a business family is based.

Step Six: Succession Plan

Both for the leader and for the rest of the people, the time comes when the passing of the years leads to a loss of energy and therefore the decisions made are not appropriate, even the time comes when the leader dies; For this, it is important to have a plan in advance that prevents the absence of the leader from leading to the collapse of the company and even the family.

The succession plan must include the profile that the new head of the company wants to have, for which it is suggested that the current leader have candidates for the position, choose the most capable among them, and begin to develop them for their work, in order to so that, when the time comes to hand over the baton, the successor is prepared to make decisions autonomously and with full knowledge of the business.

In the same way, it is very important to have a clear definition of who is going to leave the property of the company and who is going to lead the family council.

Seventh step: Governing bodies

Once the structure of the company and the family has been defined, as well as the action to institutionalize the company has been implemented, the government bodies must begin to be defined.

These are a kind of work cells that go from the responsibilities of the shareholders, the Board of Directors, to the general director, supported by the arms of areas focused on auditing, finance, and human resources.

Eight step: Implement a Family Council

For companies that start the process, it is recommended to start by implementing a Family Council and a Board of Directors, which will ensure the coordination of the Family Council, Board of Directors, management of family assets, as well as the definition of the strategic vision, approval of the management of the director and communication with the shareholders, respectively.

In the event of conflicts between family members of interest or power for control of the company, depending on the case, the best solution is to appoint a third party, outside the family, as mediator or arbitrator as appropriate in accordance with the protocol.

For this, it is also useful to create a support committee of the board of directors or a family measurement committee that includes among its members two or three people independent of the family.

Taking care of these key points, the success and the probability of continuity of the company increase substantially, together with an assurance of family harmony.

The most important detail is to make the decision and take control of your business, get involved in the change initiative, and improve. The tools are at your disposal to know them and decide to apply them.

Business opportunities or actions to improve always present themselves, and if we are aware of them, then we will not waste time waiting for them.

We must prepare and train so that when they appear we know what to do and take advantage of them in a timely manner. Although the leader is in charge of making the decisions and having a vision of the objectives and goals, being accompanied by professional experts, empowering his collaborators, and promoting communication, and transparency with the family, will be essential.

The commitment of partners, family members, and collaborators to remain united is required, to maintain both joint economic power and business and family harmony.

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