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10 questions families need to answer before starting a business

10 questions to askReady to go into business with Aunt Kate? Is there a spot in the company for that ne'er-do-well brother of yours? Just how fit is your family to run a business together?

 

 

Here are 10 questions that family business experts say you should answer to determine if you and your clan can run a lean and mean family machine.

1. Have you held a formal family business meeting, drafted a mission statement, set a business strategy and established processes for entry, exit, hiring and firing?
2. Have you determined how business decisions will be made, and by whom?
3. Have management and reporting relationships been clearly defined?

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4. Do individual family members communicate openly and honestly about the business?
5. Have you drafted clear job descriptions?
6. Is job compensation fair and equitable?
7. Are family members willing and able to shoulder the responsibilities of their job?
8. Have you developed a formal process to resolve conflicts?
9. Will formal business meetings be held on a regular basis to resolve issues?
10. Is there a contingency plan to seek outside help to facilitate better communication?

Jay MacDonald is a contributing editor based in Florida.

-- Posted: June 29, 2001

 

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See Also
It takes more than love for a married couple to successfully run a business
SmallBiz Adviser: complications of buying a business from family members
Tips for feud-free family financing
Picking the perfect business partner
Choosing a business structure for your small company

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