Category Archive: Family Businesses

Pros and Cons of Working in a Family Business

~by Vincent Spivey~

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Pros and Cons of Working in a Family BusinessEstablishing a family business and passing it to your children can be vastly rewarding. A family business is a commercial enterprise involving family members. But the thing is, family businesses show ownership and sometimes management challenges. A perfect way to minimize the risk of disputes is to plan with the whole family.

Try imagining this scenario: it’s Monday and you arrive at the office early to make up for your partner who hasn’t been so productive for the past few days. A normal employee would go ahead and complain to the boss, right? But what if the situation is like this: That partner of yours is your boss’s son. Of course, that makes the situation a whole lot more difficult for you, for sure.

So, here are some of the pros and cons of working in a family business.

Pros:

  • Pros and Cons of Working in a Family BusinessYou’re working with people who you love, trust and care about. It can be a supportive environment for you.
  • The work environment does not pressure you too much. For example, you can arrive late or leave the office early because of some important things to do. It wouldn’t be a “heavy issue” as it is with other companies.
  • Since you’re family, you usually understand that if the situation gets tougher, you can sacrifice a little bit to achieve your goals.

Cons:

  • Family members are often promoted even if there are some non-family members who deserve the promotion. This can lead to conflict within the business.
  • Some families bring their work to the home or family matters to the office. They should be able to separate personal issues from work because this may also bring issues.
  • It may be hard for family members to make decisions when it comes to the business, as this may negatively impact other family members as well.

Takeaway

Working in a family business can sometimes be fulfilling and at the same time daunting. If you’re part of the family, any emotional conflicts should not be brought to the office. Aside from that, treat everyone (family member or not) equally. As much as possible, stay neutral in any family discussion. These things are the key for you to achieve success in the business your family put up.


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Vincent SpiveyMeet the Author: Vincent Spivey

Vincent Spivey is a business associate by profession and a blogger and writer by heart. He is an avid supporter of original content and intellectual property, and he often writes for The Livingston and Loeffler Law Firm, a group of intellectual property rights lawyers in Miami.

To follow his works, visit: http://www.lliplaw.com  and  Twitter: https://twitter.com/VincentSpiveyLL


Permanent link to this article: http://www.leadershipgirl.com/pros-cons-working-family-business/

Starting a Family Business? 5 Ways to Ensure Success

~by Lizzie Weakley~

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Running a family business can be as challenging as starting a business with an associate or former coworker, if not more so. There are personal feelings to consider as well as bruised egos. Plus, they’re people you love. And if you don’t have a plan in place, dissension can easily detract from results.

If you’re starting a family business and looking for ways to better ensure its success, consider these helpful tips.

1. Select a Leader

Whether it’s you or your older brother, designate someone as leader of your management team. This should be the person who is most experienced in the industry or has the greatest product knowledge. His or her decision will also have more weight. Choosing a leader can help you avoid bitter disagreements that can hamper your company’s results, according to Entrepreneur.

2. Establish Roles

family businessChances are, when you selected your family team, you were aware of their abilities and talents. Harness these talents by assigning everyone specific positions and duties within the company. Put these job descriptions in writing so family members can familiarize themselves with their responsibilities. Having predefined roles enables you to work better as a unit and get more done.

3. Put Family First

More than a few family members have become estranged from bad business relationships. While it may be challenging at times, especially when making decisions, set certain boundaries for creating business strategies, according to Fox Business. Do not ruin family bonds over any business issues.

4. Train Everyone in Advance

Make sure all family members are trained on operations and policies before you open for business. This is especially crucial if you’re opening a franchise business, where none of you have particular expertise. Make sure all family members have some familiarity with each other’s roles so they can fill in should someone call in sick. Training runs the gamut from word processing and data management courses to seminars in presentations. If you’re the leader of the business, consider an online MBA program. This can enhance your understanding of the various functional areas of organizations, such as marketing, finance, and research and development, giving you greater conceptual skills to succeed.

5. Create a Business Plan

A business plan can help get your company headed in the right direction. Some common facets of business plans are organizational structure, market analysis and financial projections. You should also create a clear vision statement for your business so everyone is on the same page.

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While running a family business is challenging, you can overcome some of the typical pitfalls by adhering to some or all of these strategies.


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Lizzie WeakleyMeet the Author: Lizzie Weakley

Lizzie is a freelance writer from Columbus, Ohio. She went to college at The Ohio State University where she studied communications. In her free time, she enjoys the outdoors and long walks in the park with her 3-year-old husky, Snowball.


Permanent link to this article: http://www.leadershipgirl.com/starting-family-business-ensure-success/

Creating a Dream Team for the Family Business

~by Donya Zimmerman~


For your family business to succeed, you need to create a “dream team”. The “dream team” for the family business consists of:

  • Accountant
  • Attorney
  • Insurance Agent
  • Bookkeeper
  • Business Coach
  • Banker
  • Mentor
Dream Team

Put together your Family Business Dream Team

Here are some important groups to have on the “dream team” for the family business:

  • Board of Directors
  • Management Team
  • Human Resource Management
  • Legal Team
  • Support Team

The business owner, of course, is the first member of the “dream team” because they are one who starts, develops, runs, and grows the business. Also, employees play a valuable role in the daily operation of the business because without employees the business cannot run and operate smoothly. An attorney is an essential key player in any business because of the legal implications in operating a business. An attorney’s role can be best described as “protector of your business” from legal implications or legal issues that may come up unexpectedly.


An attorney’s duties can include:

  • Review and draft of business contracts
  • Set-up your business as a legal business entity (LLC, Inc., Corp, etc.)
  • Represent the business in legal matters
  • Provide guidance so that everyone is abiding by all the local rules, laws, and regulations in the operation of the business.


An accountant is essential to the daily operation of your business because the accountant deals with the finances of the business, ensuring that your finances and your taxes are in order to avoid tax trouble and minimize your likelihood of being audited by the IRS. Your accountant will help you properly record your profits, losses and expenses for your business. But you should not rely on your accountant alone to handle your finances and taxes for your business. Always be aware of what your accountant is doing. You should have first-hand knowledge of how your accountant is handling your finances. A good way to do this is by setting up a system that enables you to organize and record your business financials on a daily basis. 

You’ll also want a reliable bookkeeper. The bookkeeper deals with the record keeping of the business finances on a daily basis. A bookkeeper will make sure that all employees get paid on time, all debts owed to creditors are paid on a timely basis, all taxes owed are paid (payroll taxes, Medicare, social security taxes, FICA, withholding taxes, etc.), and all monies owed to the business are collected on a timely basis. The bookkeeper works hand in hand with your accountant to ensure that all the profits, losses and expenses regarding the business are properly recorded. You should have a good relationship with both the accountant and bookkeeper because they are assisting you with the business finances.

You should also establish a good relationship with your banker. They will assist you with opening an account for the business and provide you with the appropriate banking tools needed to run the business smoothly. Also, having a good relationship with the local bank will help if the family business ever needs loans, lines of credit or other financial tools needed to keep the business afloat financially. 

An insurance agent is good to have because the family business will need insurance to protect the business from all kinds of problems and issues that may come up. An insurance agent can set your business up with the proper insurance to protect business assets, personal assets, and the financial future of the business.

Every business owner should have a business mentor. An ideal mentor for the family business is someone who has had a similar business. A mentor is there to provide you with sound advice regarding the business and to answer any questions about running a business when needed. A mentor will connect you with the right people and organizations who can assist in the growth and prosperity of the business. A mentor is there as a friend, counselor and teacher for you to learn and grow from as a small business. 

Remember to have that “dream team” together and ready when starting a business because they are there to ensure that the business is a success and not a failure.


This is the 5th article in my Starting a Family Business series.

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Meet the Author: Donya Zimmerman

Donya Zimmerman
Donya Zimmerman

Donya Zimmerman is a business consultant, mediator, and legal professional with over ten years of experience. Donya is also a public speaker and aspiring author. 

She is owner of Family & Community Mediation and Business Consulting (FACMBC) and Powerful Biz Woman (subsidiary of FACMBC), both of which are based in Baltimore, MD.

Services provided by FACMBC:  Mediation and Conflict Resolution Services; Business Registration Assistance; Business Plan Drafting Assistance; Business Certification Assistance; and Business Organization Assistance. 

If you are thinking about starting your own small business or non-profit organization, do not hesitate to contact me because I can show you how to do so.

For more information about Donya:



Permanent link to this article: http://www.leadershipgirl.com/creating-a-dream-team-for-the-family-business/

Is Your Family Business Properly Insured?

~by Donya Zimmerman~


To protect your family business, you’ll need to do more than a business plan or incorporate the business. You’ll also want to have the right insurance for the business. It can protect your business from possible disasters:

  • Natural disasters like fire and etc.
  • Negligent acts committed by employees
  • Customers being injured on the business property


With proper insurance the family business can remain open and not be forced to close due to expensive lawsuits. The business owner needs to ensure that they have the proper business insurance needed to operate the business in an efficient and effective manner.  There are many benefits to having insurance for one’s business. Operating a business is very challenging without having to worry about major financial loss or monetary loss due to unforeseen and unplanned circumstances.   

Insurance can protect your business from losses commonly experienced by small businesses:

  • Protection from property damage
  • Business won’t be interrupted
  • Will not have to deal with theft, personal liability or employee injury
Protect Your Family Business With Commercial Auto Insurance

Protect Your Family Business With Commercial Auto Insurance


Buying the right commercial insurance coverage certainly makes the difference between losing one’s business to a dissatisfied client in a lawsuit or recovering with minimal business interruption and financial impairment to the company’s operations. Before buying any type of commercial insurance for the business, it is advisable to speak with an insurance agent to figure out which type of insurance will meet the needs of the business.

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Here are some of the basic types of commercial insurance to consider for your small business:

  1. Commercial Auto Insurance: This type of insurance is purchased to cover all vehicles that are used for business purposes and business operations.
  2. Property Insurance: Protects the business property from a number of possible losses.
  3. Liability Insurance: Protects the business assets and personal assets of the business owner from different types of liability.
  4. Business Interruption and Continuation Insurance: Provides coverage for business expenses associated with running a business, i.e. utility bills and payroll.  This type of insurance comes into play when the business is out of operation for a long period of time due to fire or reasons beyond the owner’s control.
  5. Professional Liability Insurance: Better known as Errors & Omissions insurance, it provides protection to the business for damages when a professional advisor, employee or board member is negligent or fails to use due diligence.

There are many other types of insurance coverage a family business should consider purchasing to protect their business. So, please speak with your insurance agent to figure out the best commercial insurance coverage for the family business.

This is the 4th article in my Starting a Family Business series.

Stay tuned for the final article in this series.


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Meet the Author: Donya Zimmerman

Donya Zimmerman

Donya Zimmerman

Donya Zimmerman is a business consultant, mediator, and legal professional with over ten years of experience. Donya is also a public speaker and aspiring author. 

She is owner of Family & Community Mediation and Business Consulting (FACMBC) and Powerful Biz Woman (subsidiary of FACMBC), both of which are based in Baltimore, MD.

Services provided by FACMBC:  Mediation and Conflict Resolution Services; Business Registration Assistance; Business Plan Drafting Assistance; Business Certification Assistance; and Business Organization Assistance. 

If you are thinking about starting your own small business or non-profit organization, do not hesitate to contact me because I can show you how to do so.

For more information about Donya:



Permanent link to this article: http://www.leadershipgirl.com/is-your-family-business-properly-insured/

Steps to Incorporate a Family Business

~by Donya Zimmerman~

The most valuable step to starting a family business is to ensure protection from lawsuits and loss of personal assets. So you’ll want to incorporate your business.

Family Business

Incorporate Your Family Business

Here are some steps and considerations when incorporating a small business with your local governmental agency:

  • Formation Documentation: The formation documentation to incorporate a business is normally called the Articles of Incorporation or Certificate of Incorporation, it depends on the governmental agency terms used.
  • Fees. The fees for registering a business as a company runs from $50 to $400.    
  • Waiting Period. The normal waiting period to have the formation documentation approved by the governmental agency varies from four to six weeks (non-expedited services). But, for an extra fee for expedited services, a business can have their paperwork approved within a few days or even a few hours. In many countries and states, you are now able to fill out the formation documentation online, which will speed up the approval process.
  • Disclosure. You’ll need to disclose certain information in the incorporation documentation, such as:
    • Company Name.
    • Business purpose, both general purpose and specific purpose.
    • Registered Agent.
    • Incorporator – the person or company who is incorporating the business.
  • Registered Agent. Must have a registered agent who is the individual who can accept service of paperwork for the company.


These are just some general considerations when deciding to incorporate your small business as a legal entity in your particular state or country. It is advisable to consult with your attorney, accountant, and business consultant to determine the best incorporation form for your family business.

 

This is the third article in my Starting a Family Business series.

Stay tuned for more articles in this series.

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Meet the Author: Donya Zimmerman

Donya Zimmerman

Donya Zimmerman

Donya Zimmerman is a business consultant, mediator, and legal professional with over ten years of experience. Donya is also a public speaker and aspiring author. 

She is owner of Family & Community Mediation and Business Consulting (FACMBC) and Powerful Biz Woman (subsidiary of FACMBC), both of which are based in Baltimore, MD.

Services provided by FACMBC:  Mediation and Conflict Resolution Services; Business Registration Assistance; Business Plan Drafting Assistance; Business Certification Assistance; and Business Organization Assistance. 

If you are thinking about starting your own small business or non-profit organization, do not hesitate to contact me because I can show you how to do so.

For more information about Donya:



Permanent link to this article: http://www.leadershipgirl.com/steps-to-incorporate-a-family-business/

How to Properly Incorporate a Family Business

~by Donya Zimmerman~

When starting a family business, you’ll need to determine the best way to incorporate it so you can protect your assets. By incorporating the family business with the proper governmental agency, you’ll ensure that the business is protected, and the business assets and personal assets are protected. With this type of protection, the family can enjoy being in business without the fear of losing everything. Also, it is good to have the proper business licenses needed to conduct business in certain states.

Protect your assets in your family business

Protect your assets in your family business

Here are the different types of incorporation that can be used for a family business to be seen as a legal entity:

Sole proprietorship. Simplest business form and not a legal entity. The business is not legally separate from the owner. The owner’s personal assets and obligations of the business are not distinguished. 

General Partnership. This is the simplest form of partnership and is created when two or more individuals engage in business together for profit. A general partnership can begin with just a verbal agreement and a handshake. There is no liability protection in this form of business, and every partner is equally liable for all debts and obligations of the business. Also, the personal assets of each partner can be used to pay such debts.

Limited Partnership (LP). There are two classes of partners (general and limited).  The general partners normally handle the day to day operations of the business, and are held personally liable for the business debts and obligations. Limited partners only contribute money and capital to the business. The limited partners are not involved in the daily operation of the business, and their personal liability does not go beyond their capital contributions to the business.

Limited Liability Partnership (LLP). This business entity is a hybrid and similar to a Limited Liability Company (LLC). All partners in the business handle the daily operation and management of the business. Unlike the Limited Partnership, Limited Liability Partnerships ensures that all partners’ personal assets cannot be used to satisfy the business debts and liabilities like an LLC. LLP partners are ensured that they will not be held accountable for the acts of other partners (they’ll have personal liability protection).

Limited Liability Company (LLC). An unincorporated business that can be formed by one or more individuals with no personal liability for debts of the LLC. An LLC is unique because for statutory purposes, it is treated like a corporation regarding limited liability of partners and partnership status for tax purposes.

Corporation. An independent entity. The corporation is separate from the owners of the business. There is no personal liability for owners of the business because the corporation is responsible for its own debts and liabilities. The business entity outlasts the death or disability of all stockholders.

S-Corp and C-Corp. These have the general guidelines of a corporation. Must be registered with the governmental agency, similar to a corporation. There is no difference between S-Corp and C-Corp for purposes of Corporate Law.  S-Corp does not have double taxation like a C-Corp.  C-Corp has double taxation because it is treated as a separate taxable entity, and distributions to stockholders are generally treated as dividends. S-Corp is generally a better option than C-Corp because it provides liability protection of a corporation while allowing tax treatment similar to a partnership.

This is the second article in my Starting a Family Business series. Stay tuned for more articles in this series.

You can read the first article in this series here: The Basics of Starting a Family Business

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Meet the Author: Donya Zimmerman

Donya Zimmerman

Donya Zimmerman

Donya Zimmerman is a business consultant, mediator, and legal professional with over ten years of experience. Donya is also a public speaker and aspiring author. 

She is owner of Family & Community Mediation and Business Consulting (FACMBC) and Powerful Biz Woman (subsidiary of FACMBC), both of which are based in Baltimore, MD.

Services provided by FACMBC:  Mediation and Conflict Resolution Services; Business Registration Assistance; Business Plan Drafting Assistance; Business Certification Assistance; and Business Organization Assistance. 

If you are thinking about starting your own small business or non-profit organization, do not hesitate to contact me because I can show you how to do so.

For more information about Donya:



 

Permanent link to this article: http://www.leadershipgirl.com/how-to-properly-incorporate-a-family-business/

The Basics of Starting a Family Business

~by Donya Zimmerman~

Starting a small family business can be a daunting task. At times, being around family members can be very difficult and stressful. Going into business with family members means that not only will you see them at home, but you will spend a lot of time with them at work as well.

Starting a family business is not the same as starting a business with strangers and friends; you have to be mindful of not allowing close ties and personal feelings to play a part in major decisions of the daily operations of the business. When it comes to family business dealings, maintaining both professional and personal relationships is a tricky thing, and can be quite challenging. It is advisable to not allow your personal feelings and emotions to get in the way of doing business.

However, it can be the best thing to go into business with family because they have the same drive and ambition to want the business to succeed.

Family Business

Family Business

When deciding to start a business with family members, you must take certain things into consideration before doing so.

With a family business, you have to decide on the following:

  • Who will be in charge of the daily operations of the business?
  • Who will be in charge of sales and getting new customers?
  • Who will handle the money for the business?
  • Who will handle the firing and hiring of employees?

The first step to starting a family business is to have an initial meeting to determine the type of business, the products and services to be sold, and the main operations of the business. It is very important to set up a support system when starting a family business, which includes friends and colleagues who do not have close ties to the family. Having a good support system will ensure that the family business is run efficiently and effectively. 

For many countries around the world, family businesses help provide economical stability. Family businesses have helped families create a sustainable source of income. The key to a successful family business is to understand that the family must know how to run it like a “true business”.

This is the first of 5 articles in the “How to Properly Set up a Family Business” Series. Be sure to look out for the rest of the articles in this series.


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Meet the Author: Donya Zimmerman

Donya Zimmerman

Donya Zimmerman

Donya Zimmerman is a business consultant, mediator, and legal professional with over ten years of experience. Donya is also a public speaker and aspiring author. 

She is owner of Family & Community Mediation and Business Consulting (FACMBC) and Powerful Biz Woman (subsidiary of FACMBC), both of which are based in Baltimore, MD.

Services provided by FACMBC:  Mediation and Conflict Resolution Services; Business Registration Assistance; Business Plan Drafting Assistance; Business Certification Assistance; and Business Organization Assistance. 


If you are thinking about starting your own small business or non-profit organization, do not hesitate to contact me because I can show you how to do so.

For more information about Donya:



 

Permanent link to this article: http://www.leadershipgirl.com/the-basics-of-starting-a-family-business/

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