Seven tips on managing a bootstrapped family business

Filed in archive Entrepreneurship on September 9, 2007

Family financing can be one option when bootstrapping your startup venture according to this article from "Startup Nation".

But managing a family owned or operated business may require a different approach to respond to the special interpersonal dynamic involved.

Here from the Arjen Moon blog via Denise O'Berry at AllBusiness are author Edward Hess's seven tips for managing a family business, bootstrapped or otherwise:

1. You cannot manage family business issues in the same style or manner as most entrepreneurs manage their business.

2. The process of how family members have input, communicate, debate, and reach consensus is as important as the particular family issue or its specific resolution.

3. Family business issues are complex and it takes time for people to get comfortable - time for people to understand other people's perspectives and time for people to reach consensus.

4. Proactive and preemptive management of family business issues is better than reactive management. Proactively dealing with upcoming issues can mitigate uneducated opinions, anger, jealousies, and greed.

5. Values such as respect, integrity, fairness, love, and stewardship are the foundation of reaching results that are in the best long-term interests of both the business and the family.

6. Caring, respectful listening is more important than a quick answer or a quick solution. In most cases, there are deeper family issues that need to be addressed, considered, and factored into the equation.

7. The fundamental overriding principles of managing a multi-generational family business are: a) Transparency, b) Inclusiveness, c) Consistency, d) Fairness