It’s said that small-scale businesses are the foundation of US business. It is also possible to say that family-owned companies are the brains behind many of them.
The Small Business Administration says family-owned businesses make up 90% of the businesses across the US. This figure includes massive corporations such as Mars Inc. and Wal-Mart, as well as top earners such as Berkshire-Hathaway. However, the majority of family-owned firms are small. According to the Census Bureau says 28% of small businesses are family-owned and account for 42 percent of small business revenues.
Business Brokers Can Identify Family Business Opportunities
If you’re contemplating buying a company with your family members, make sure that it’s for a product or service that everyone enjoys and is supportive of, says Entrepreneur. If, for instance, your spouse enjoys cooking and cook, a restaurant or specialized food franchise might be a perfect combination. Also, if you’re thinking of applying your business knowledge and experience, and B2B (business to business) shop similar to a print shop offers plenty of opportunities to connect directly with other businesses.
The process of starting and running a business takes time and effort. However, you don’t need to begin with a blank slate. Think about buying an established company in a field that is interesting to your family members and that everyone can benefit from.
You can turn to an experienced business broker to identify opportunities that are suitable for your family. They can serve as your agent and search for listings of sales and offering valuation comparison services that help determine the possible Return on Investment (ROI) for various options, as well as helping you arrange financing to purchase an existing company.
Consultants and business brokers provide services that blend the expertise of realtors, mortgage finance, and real property law into one single shop. The best brokerage firms have a CBI (Certified Business Intermediary) and a CPA (Certified Public Accountant) and experts who are licensed to conduct real estate transactions.
Ground Rules for Family Companies
Everyone who has founded or bought a company with relatives suggests establishing some guidelines and limits similar to these suggestions in Inc.:
Only accept those who could contribute to the cause. Don’t force anyone who’s hesitant to sign up.
Set clear roles such as titles, job duties, and pay. You should provide pertinent appraisals of performance for family members as well as other non-family members who are involved in the business.
Do not abuse your family relationships. Everyone is treated equally.
Be honest and transparent with employees. Do not make employees who aren’t family members feel excluded from the company.
Do not confuse family-related decisions with corporate decisions. A family council comprised of the owners who don’t have a hand in the running of the business could be helpful in addressing issues and preparing business plans.
Create the boundaries between family and work life.
Entrepreneur encourages family-owned businesses to have input from everyone who is involved, even the children who are naturally adept at providing advice on products for consumers such as fashion and music. It’s also a great opportunity for children to be introduced to the idea of earning an income and to see how it’s done. Contact a business broker today to start searching for your ideal company right now.
Jill Smith is a writer and researcher. She is also the Director of Digital Content Marketing at Be Locally SEO, where she is passionate about helping clients grow and grow their businesses by providing blog posts, articles, websites, content, and much more.