Family-run businesses

Key things to consider when setting up a family business

Setting up a family business can be an exciting challenge. Before you go ahead it's important to consider how you'll deal with a number of issues that commonly confront such ventures. Think about how:

  • the business' shares will be allocated between family members and if there will be non-family shareholders
  • to ensure business decisions are taken for business reasons, rather than personal ones
  • the roles and responsibilities will differ between family shareholders who are active in the business, those who aren't, and outside shareholders
  • to reward family members, whether it will be different to remuneration for non-family members and what problems this could cause
  • you will cope with conflict when it arises
  • to communicate with your family when you are also their boss
  • to avoid resentment when deciding who will succeed you
  • to ensure that the family's finances aren't entirely dependent on the business

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