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An essential checklist for setting up a family business

An essential checklist for setting up a family business

In a new Business Advice series explaining the mechanics of running a family business, Grid Law founder David Walker outlines the early considerations that must be taken before going into business with relatives. Working together in a family business is a dream for many people. The trouble is, that dream can easily turn into a nightmare when problems in the business cross over into family life. So, how do you prevent this from happening? To start with, just because you want to be in business together, it doesn’t mean that you should be. Being in any business can be very rewarding but there’s no doubt it brings its own difficulties and stresses too. These can multiply if, for example, you don’t have the right skills or experience between you, or you have different ambitions for the business. So, if you are thinking of starting a family business, here are a few things for you to consider. If you’re already running one and you haven’t thought about these issues, now is a good time to do so. But remember, there are no rights or wrongs here. You just have to accept that unless all of your business and family goals are aligned, working together may not be the best plan for your family. A shared vision A great place to start is to consider your vision and ambition. Ask yourselves why you want to be in business as a family? Is it to spend more time together, or do you want to build an empire to support generations to come? If you’re not all aiming for the same thing, then chances are one or more of you will end up disappointed. Next, think about ownership and control. You may be starting as a family business, with only family members owning and running it, but will it always stay that way? As the business grows, will you open it up to non-family members? This may be inevitable if you don’t have family members with the right skills to fill the roles. If you want it to remain a family business, how far out do you extend it? Cousins, aunts, and uncles may be included, but what about non-blood line family members such as in-laws? If you do have other, non-family members on the board, you have to remember to fully include them in the decision making of the company. Now, this may seem obvious, but how many meetings or discussions are held round the dinner table rather than in the board room? Whilst ownership and control may stay within the family, most family businesses will have non-family member employees. This is fine, and as with any other business, you simply recruit the...

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Six smart ways small businesses can save money

Six smart ways small businesses can save money

Small business owners don’t usually have vast reserves of cash they can dip into should things get tough. Here, content head at digital marketing agency BlueGlass, Irma Hunkeler, gives six smart ways small businesses can save money. Life for a small business is rarely easy, and with maintaining healthy cash flow a major issue, opportunities for saving money – however small – should be seized wherever possible. Use freelancers The “gig economy” has its fair share of critics, but use it well and it can really be to your advantage. Lots of companies today are employing freelancers to take on a range of jobs, from email marketing to business development to cyber security, and everything in between. There are now 1.91m independent professionals according to The Association of Independent Professionals and the Self-Employed (IPSE), and the UK’s burgeoning freelancer base is a great resource you could tap into if you need something done but want to save costs at the same time. Using freelance capacity is a much more flexible option than recruiting a permanent, in-house member of staff. It allows you to employ someone for a specific period of time to do a job, with the rate agreed upfront. Encourage employees to be financially savvy It pays to be smart with money at work. While you might be looking for ways to tighten the purse strings, are your staff doing the same? Encouraging them to help find ways the company can save cash, however small, is a no-brainer. If you’re big enough, you could organise a workplace investment scheme or offer your employees suggestions on how they could save money – such as a cycling to work in order to cut commuting costs. Remember that employees have an appetite for saving. This infographic shows that even when winning £50 playing online games, for example, most people would choose to keep it in the bank rather than spend it. So, if your employees are keeping an eye on their own wallets, it’s likely that they’ll also keep an eye on their employer’s wallet too. Review, review, review A tip from the world of personal finance that we can apply to ways small businesses can save money is to review outgoings and strike out any that you don’t need. Just as consumers often have gym memberships, magazine subscriptions and paid streaming services that they rarely use, it’s likely your company does too. Review your spending and get strategic – if you’re definitely not using something that you’re paying for, and it’s having no tangible effect on the company, get rid of it and save the money, or put it into something worthwhile instead. Offer flexible working Employees now have a...

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Going into business with friends

Going into business with friends

The first key to making business with friends work is ensuring that, as with any other business decision, you enter into the partnership with a clear head and agreed shared objectives. The process of entering into business with friends needn’t be dissimilar to entering into it with a stranger. Someone will not necessarily be a good match for you as a business partner by virtue of being your friend, and you must be impartial and transparent when deciding whether it can work. If you know you are not compatible as business partners then you must treat your friend and yourself with honesty. There are countless tales of friendships being forever tarnished by a business, and you don’t want to find yourself in a position where you are faced with a choice between losing an important friendship and risking your business. I have personal experience of this. In the past I brought a good friend of mine into a business that I was CEO of. After a while it became clear that he simply wasn’t up to the job in hand and I had no option but to let him go. That was 17 years ago and we have never spoken since. While I regret losing him as a friend, I know that it was the right decision for the business. You need to be able to quickly establish the direction you see yourselves and your company heading in. What is your five-year plan? Your ten-year plan? How are you getting there? If these are issues you don’t agree before entering into business, the problems will only exacerbate as time goes on. Next you must be clear on your roles. The best partnerships and the best friendships come about when two people complement each other’s personality and skill-set. One of you may be better suited to the hands-on running of the business, another may be a good public face who enjoys the marketing side of the business. Know each other’s strengths and play to them. When it comes to going into business with friends it also helps to have worked together previously. How you behave in a pressurised working environment does not necessarily correlate with how you behave in your leisure time. Having some idea of what awaits when you are working together will prepare you better. Once you have entered business it is imperative that you are transparent and candid with each other. This is an area where working with friends has potentially huge benefits. You can be honest with each other in a way you would not be with a stranger, you can bounce off each other’s ideas. With concerns about politicking out of the way and the propensity...

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