Despite its challenges, running a family business can be long-term, lucrative venture. It’s also a great way to teach your kids to be entrepreneurs in a hands-on environment. This experience will help them greatly if they choose to pursue entrepreneurship on their own.
Founding a family business requires strong interpersonal skills to interact with relatives as you would a business partner. Often, family dynamics are dragged into the business, making it difficult to establish a professional environment.
Rivalry and guilt are two common themes that pop up inside a family business. Not everyone can be the CEO or decision maker. Entrepreneurs weak in their resolve to put business first might feel guilty for not giving more power to family members, despite knowing it’s not a good match.
Once you get past the potential conflicts of starting a family business, there’s one more consideration you need to address: finances.
Before you assign everyone their roles and responsibilities, consider involving everyone in the financial aspect of your business to some degree, especially your kids. Not everyone needs to be a financial decision maker, but being aware of finances can actually help them fulfill their seemingly unrelated roles. Teaching your kids about finances through your business will help them develop financial intelligence they can use throughout their life.
How to get younger kids involved
Your kids may not be old enough to help you make tough investment decisions or rework your expenses, but they’re never too young to learn the general principles on a smaller scale. For example, if you need to save for a large business purchase, help your kids experience long-term saving as it relates to their lives.
Remember that “long-term” planning for younger kids should involve a shorter time span. To a child who earns an allowance of $5 per week, saving up for 4 months to make a single purchase is too much; 4 weeks is more realistic. Asking them to save their allowance for too long might cause them to give up, destroying the lesson.
In a brief video series, two financial planning experts provide excellent advice for teaching kids how to save for future purchases. In this video, they suggest figuring out what the child likes and posting a picture of the item on the refrigerator with the cost. Then, based on the child’s weekly allowance, do the math with them to calculate how long it will take for them to save up for the item.
If the item would take an extreme amount of time to save for, like a brand new bicycle, teach them how to find a better deal on a used item through Craigslist.
Understanding financial impact increases productivity
In the food service industry, one worker might cause $50 worth of product waste per day out of ignorance. On a daily basis, food gets dropped, lids and napkins fall on the floor, meals are accidentally prepared with allergens, and dishes are accidentally broken. This appears to be unavoidable, but awareness of the exponential financial impact can prevent these mistakes from happening as much.
Dropped food doesn’t seem like a big expense until you look at the impact of the same mistakes being made by every employee, every day. What appears insignificant to a single worker who drops a stack of napkins is a black hole sucking away thousands of dollars on the company’s balance sheet.
When your whole team has a well-rounded understanding of finances related to your business, and how mistakes and waste affect the bottom line from the 5,000-foot view, they’re more likely to be careful while performing their duties.
Family businesses can be successful and legendary
When properly managed, a family business can turn into a timeless legend. A perfect example of legendary success is the world-famous In-N-Out Burger – a family owned restaurant founded in 1948 by Harry Snyder and his wife, Esther.
Dedicated to serving fresh food from day one, the Snyders insisted on using fresh beef instead of the frozen patties used by other fast food chains. Their fries have always been made from fresh potatoes sliced on the spot, and milkshakes have always been made with real ice cream.
Instead of cluttering their menu with too many choices over the years, In-N-Out has remained dedicated to the classics and has been serving them up better than anyone else ever since.
Today, In-N-Out Burger boasts over 300 locations and none of them are franchised. They pay their employees well above minimum wage and have the lowest turnover rate in the food industry.
Harry Snyder’s motto gives away a huge secret to a successful family business, “Keep it real simple. Do one thing and do it the best you can.”