Managing a Family Run Business

Posted by Southwest Beverages on 12/16/2014

managing a family business“Never hire family.” I’ve heard that plenty of times and I’m sure you have too. Some believe that you should never mix your professional life with your family. I disagree.

It doesn’t have to be a “pain” working alongside your family. In fact, I believe it can be exceptionally fulfilling. You’re elbow deep with the people you love, directly improving each other’s lives. There’s no greater satisfaction than building something with your loved ones and then enjoying it together.

Don’t get me wrong - it’s not easy. It takes work, dedication and a commitment to one another. To me, it’s worth the trouble, so I offer you these tips that might help you better manage your family owned business.

Formalize Your Business Relationship

Just because you trust your family to do what’s in the best interest of the business doesn’t mean you all agree on the direction. I strongly suggest the business venture have a legal identity rather than being just a “hobby” that has grown. To do this, have an attorney formalize the entity and draw up an operating agreement. Just like any company, it’s important that everyone have clearly defined roles and responsibilities. Accordingly, identify specific family members to be the senior officers of the company and the roles and reporting responsibilities of the other family members.

Someone Has to Lead

In electing the senior officers of the company, I suggest all family members have a “say” in the process. Elect those family members that are qualified to fill the position rather than simply appointing, out of respect, Mom and Dad as the Treasurer and President, respectively. Instill in all family members the respect for the company leaders; after all they are the one that you will trust to make fast, impactful decisions for the company at critical times.

Business is Business

While everyone needs to go into this adventure with an open mind, a “business is business” culture should be established. The diplomacy and tact we show one another in our personal lives doesn’t have a lot of place in business–especially a new, growing business. You have to be able to openly discuss when someone isn’t performing well and how they can improve.

An excellent adage I once heard goes, “Think ‘merit,’ not ‘inherit.” Everyone should be involved because they bring something to the table to grow the business. This is particularly true for a start-up company when there always seems to be too few hands to do the many things required. From experience I have learned to assign people tasks that they enjoy doing-it’s makes for a healthy environment and a place where people want to come to work. While one person might not enjoy a specific task another member might. A good manager is in constant contact with their employees to continuously re-assign tasks to improve the overall efficiency of the company.

Communicate Everything

Don’t expect your typical family dynamics to apply here. You need to make sure everything is communicated clearly and early. If you’re relative feels like you haven’t been forthcoming and honest, that distrust might bleed over into your personal relationship. Imagine if that conniving coworker from your work (everyone has had at least one) came home with you at night!

Family Time is Family Time

Above all, don’t confuse work time and family time just because you associate with the same people. If you’re attending a family gathering, forget about your job for the time being-enjoy the moment with your family. Remember that you’re building a business for the freedom to have these memorable leisure moments, so enjoy them!

This applies to the opposite situation as well: family drama needs to stay at home. If Aunt Carol is upset with Cousin Brandon, both need to pack it up during business hours and work together.

Avoid Creating “Classes”

Some family companies have a tendency to show preference to the family members over the non-related employees. This happens a lot when a business is started by family members and eventually hires from outside the family. Don’t show your family special treatment in any way, including salary, benefits or your favor. Everyone has a job to do and should be compensated accordingly.

If you keep these tips in mind, I have no doubt that your family-run business will be successful. They have worked well for me and my family, and we couldn’t be happier.

dry mix beveragesWritten by Bob Jenkins, Founder & Chief Executive Officer of Southwest Beverages®

Bob has had the privilege of working for some of America’s largest and well run public and private companies, including Philip Morris, Canada Dry, Dr Pepper, Cadbury Schweppes, Snapple Beverage Corporation, Tasker Capital Corp. and The Water Club and River Cafe – two of New York’s finest fine dining restaurants. He has worked in various capacities as Finance Manager, Controller, Director of Finance, Vice President Finance & Administration, Chief Financial Officer, Secretary, and Treasurer.

Bob holds a Masters of Business Administration degree in accounting from the University of Tennessee and a Bachelor of Science degree in accounting from the University of Arizona.

Southwest Beverages® is a manufacturer and marketer of two brands of premium quality dry mix beverages: Sippity® hot cocoa mixand Kemosabe® gourmet flavored coffee. All Southwest Beverages® products are uniquely blended flavors that contain all the ingredients necessary for you to enjoy the ultimate hot beverage experience. Simply add water and stir-then sip, savor and enjoy.

For more information, please visit

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Photo Credit: kevin dooley via Compfightcc
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