Family-owned businesses share unique challenges that most other businesses never have to face. From family politics to financial woes, it’s not uncommon for a family business to succumb to the pressure prematurely. In fact, only one-third of all family businesses make it to the second generation, and that figure drops dramatically for each successive generation.
So how do you give your business the best chance of long-term success? By recognizing the potential for trouble, you’re already a step ahead of the rest. Here’s how you can leverage quick business loans to effectively address problems that could destroy your business and family legacy:
Problem #1: Losing Your Non-Family Employees
It’s easy to perpetuate a culture of nepotism without realizing it, and this could be your very downfall as a family owned business. It’s rare that a team can function exclusively with family employees. Not every family member may want to be involved in the business, or they may have other plans. More likely yet, some roles in the business will require expertise that isn’t filled by your family members, requiring you to take on outside employees.
For the success of your business, it’s absolutely crucial that you address the potential for nepotism before it becomes a problem. It can be intimidating for an outside employee to join a close-knit, all-family team, and they might already feel like an outsider just stepping in the door. Don’t give them other reasons to feel excluded, or you might find yourself with a significant turnover problem.
While it might feel excessive for a small business, as soon as you consider expanding your team, you should schedule a consultation with an HR professional to discuss how to discourage nepotism before it starts. A quick consultation can give you the insight needed to create fair HR policies, even if you don’t have a dedicated HR department.
Problem #2: Low Employee Satisfaction
It’s easy to get complacent when it comes to taking care of your staff if they’re family and unlikely to speak up about being unhappy on the job. But employees who aren’t happy aren’t productive, either, and that costs your business valuable resources and time. An unhappy employee will likely “poison” other employees as well. Dissatisfied workers make 60 percent more mistakes, have nearly 50 percent more accidents, and miss work 37 percent more often than employees who are happy; and your business isn’t exempt from those statistics just because your employees are family.
It’s in everyone’s best interest to make sure that employee morale is high. Take the time to talk and more importantly listen to your team and find out what works for them and what doesn’t. You might find that your training process is nonexistent and leaves employees feeling overwhelmed, or that the compensation isn’t equitable for the amount of work being done.
You can increase employee morale by using a business loan to fund projects that are likely to increase employee satisfaction. This will depend on your team and what their needs and pain points are. Perhaps your team wants more team building activities such as potlucks and parties, or maybe they think that you need a better training system (try investing in a cloud-based dynamic training system that you can customize to each employee’s needs). The opportunities are endless.
Problem #3: Lack of Delegation
If you’re a self-starter, then it’s likely that you’re used to taking the reins on every aspect of business operations. From CEO to HR to customer engagement leader to presentation management, you do it all.
That means that you’re stretched in a million directions, and no single role is getting the attention that it requires. Even entrepreneurial powerhouses can’t magically put more hours into the day, so rather than filling your days with more tasks than can be completed in a day, think about delegating some of these roles.
Maybe you haven’t done that because you don’t have enough qualified family members who are interested in coming on board. But that’s no reason to avoid expanding your team. Rather, bring new team members on board from outside the family. Having the help of another skilled team member can lighten the load considerably, and help ensure that tasks get done timely and correctly.
You can access business funding to finance the costs of hiring and training. From creating a job posting on Indeed or Monster, to interview time, to working out the legalities of payroll and taxes, growing your team costs money, but it doesn’t have to be a burden when you have convenient access to the working capital that you need. You’ll find that the time and resources you get back from having a skilled professional on the team makes it worth your while.
Problem #4: Where’s the Succession Plan?
Nobody likes talking about end-of-life contingency plans, especially when there’s a business involved. But if your family is involved in the business, you owe it to them to have a contingency plan in place for the inevitable. Too many businesses fail when an owner passes away or becomes unable to continue running the business for health or personal reasons. If family members aren’t briefed on the next steps, it’s too easy for the business to fall by the wayside and eventually fizzle out.
Take advantage of a small business loan to fund the creation of a legally binding succession plan. This can be part of your will, or it can be a separate legal document. The important part is that it is legally binding and created with the help of a qualified legal estate planning professional.
Ready to start tackling some of the issues that plague your small business? Call Mulligan Funding at 855-326-3564 to discuss your financing options today!
*The information shared is intended to be used for informational purposes only and you should independently research and verify.
Note: Prior to January 22, 2020, Mulligan Funding operated solely as a direct lender, originating all of its own loans and Merchant Cash Advance contracts. From that date onwards, the majority of funding offered by Mulligan Funding will be by Loans originated by FinWise Bank, a Utah-chartered Bank, pursuant to a Loan Program conducted jointly by Mulligan Funding and FinWise Bank.