7 Ways to Avoid Pitfalls Common to Family-Owned Businesses in Texas
On behalf of James Welch at Vincent Serafino Geary Waddell Jenevein, P.C.
Business owners face many challenges as they strive to remain profitable in today's market. While many struggles come from outside the business or may involve internal matters with employees or management, family-owned businesses face unique challenges not present in most Texas companies.
Inter-family disputes are common and, when they involve famous people, the stories are often front-page news. For example, the daughter of Saints owner Tom Benson sued him when she found out that he was cutting her and her children out of the family business. The Texas lawsuit was recently settled but, during the process, the family's dirty laundry was aired for all to see.
Although your family business may not garner such high-profile attention, the same principles for maintaining good inter-family relationships in a business setting apply. Follow these suggestions to help your family avoid business disputes and litigation, and contact an experienced attorney from the San Antonio law firm of Vincent Serafino Geary Waddell Jenevein, P.C., when you need legal assistance and guidance.
Smart Tips For Texas Businesses
While these tips can apply to all types of business transactions and entities, they are especially important for family-owned operations.
- Commit all agreements to writing. For the good of all involved, create contracts just as you would for employees, managers, co-owners or partners who are not family members. Not only will written agreement help your business dealings, they can safeguard your personal relationships as well.
- Keep your business and your professional lives distinct: emotionally, physically and financially. Personal frustrations and disputes between family members should stay outside of the workplace. If there are family squabbles, each member must maintain his or her obligations to the business instead of retaliating through work situations.
- Have a personal life outside of work. If you work with your spouse, children or other relatives, try to maintain normal family times together. Strive to be family first, business associates second.
- Don't keep your family ties a secret. If you do not communicate family relationships to your employees, they will find out eventually and be suspicious about your motives. This can also undermine your family members' relationships with co-workers.
- Plan for the future. Do not assume that the heir-apparent wants to take over or that he or she is the best person for the position. Hold family meetings like you would board meetings, and keep the lines of communication open. Inheritance and succession issues will muddy the waters, increasing the likelihood of sibling rivalry and heated disputes once the patriarch or matriarch is no longer around to keep the peace.
- Maintain professional hiring practices. Do not put family members on the payroll unless they have actual job functions that contribute to the business. While you can be more inclined to hire a family member, consider his or her qualifications. A bad "fit" for a position can be disastrous.
- Treat all employees the same whether or not they are family. Although a family member employee may have a different career path than a non-family employee, treating that person differently may alienate the non-family employee, decreasing loyalty and motivation. Additionally, coddling family member employees may provide them with unrealistic expectations about how businesses operate in the "real world."
With all of these matters, a lawyer can provide you with the guidance you need to maintain good personal and business relationships.