For many individuals, a family-owned business is the only working life they've ever known. Maybe it's a pizza parlor, an insurance agency or a gardening company. Whatever it may be, their parents operated a business, and when the time came, the reigns were passed on to the next generation.

Combating Trouble:

Family businesses are more common than you think. According to the U.S. Small Business Administration, nearly 90 percent of all U.S. businesses are family owned or controlled. They can range in size from mom-and-pops to large corporations.

While family businesses are a major cornerstone of the U.S. economy, their survival rate isn't impressive. Less than one third survive the transition from first to second generation. The numbers dwindle as second and third generations take over ownership.

There are many contributors to these statistics; some main reasons include:

Loose management structure. Successors who aren't whole heartedly interested in the family business Squabbles over leadership and salaries within the business and among family members Family businesses are unique in that they bear some nepotism. Think back to a job you've had where the boss' friend or a family member worked with you. Did he or she receive special treatment?

Did you feel substandard to this individual because of his or her close relationship with the supervisor? The fact is, these feelings are often prevalent in family businesses as well. In many families, there is a hierarchy.

Though one individual may be better equipped to handle a situation, age or favoritism may win out.

Another contributing factor may be that siblings or relatives are on staff out of a feeling of obligation - not because they do their jobs well. Oftentimes, common business sense takes a backseat to "wanting to do the right thing" for the family. What may have worked early on in the business may not work as successors vie to take over the company.

Family business-planning

One of the best ways to ensure the success of a family business is to treat it just like any other company - putting business matters ahead of personal politics. Open dialogue and planning are tools to follow. Here are some tips:

Understand the intentions of all employees.

Foster open discussions about whoplanson sticking with the business long-term and who really isn't interested in becoming a successor. Don't force children orelatives to take leadership roles if their interests lie elsewhere. You'll only be heading for trouble in the long run.

Create a strategic family plan.

Put goals of business mem

bers into writing, and establish policies for the family's role inthe business. The plan shouldspell out a mission statement,hiring and exiting procedure,and compensation. It could head off future squabbles overcontrol, salaries and siblingrivalry.

Enforce your company mode.

As aforementioned, it is often

easy to be lenient with

Employees who are family

members. However, stay firm

about views on business etquette and no-tolerance issues. Set rules for addressing stealing,

Tardiness or other issues among employees.

Also create solid policies about loans to family members and the flow of money in the company. Everyone involved should agree with these policies.

Think about a a succession plan.

Outline how succession will occur and indicators on when that time is right. Include preparatory measures that factor in training for those who will be leading the succession. If a plan is intact, heirs may maintain a more positive outlook.

These are only a few guidelines to help make your new or existing family business a success. Modify or add to them based on the unique needs of your company.

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