Essentials

Many roofing companies are family-owned businesses that consist of family members working side by side. Often, children drop everything to help when their family business is in trouble or take over a business when a parent retires.

But the common presence of family-owned businesses is not unique to the roofing industry. Although the definition of family-owned business varies, the Family Firm Institute (FFI), Boston, released statistics in October 2003 showing family-owned businesses constitute 60 percent of all employment in the United States, 78 percent of new job creation and more than half the gross domestic product.

However, family-owned businesses' survival rates are not encouraging. According to FFI, a mere 30 percent of family-owned businesses survive into the second generation; 12 percent survive into the third generation; and only 3 percent survive into the fourth generation.

For your family-owned business to succeed, it is important you learn how to handle the unique business issues before it's too late.

Good and bad

Running a family-owned business has its advantages and disadvantages. According to www.entrepreneur.com, one advantage is family members have a personal investment in the business and, therefore, often have an especially strong commitment to see the business succeed. They will be more willing to offer free labor or money for the sake of the business.

Also, family members are sensitive to each other's personal problems. If a big problem arises, family members can cover for each other on the business end, as well as look out for each other's personal well-being.

Another advantage is family members often can contribute different skills or talents to an organization, creating a well-rounded business with a wide pool of knowledge. There often is a heightened sense of trust when working with family members because a business can save money by not having to address as many security systems, policy manuals, etc., that usually would be used to monitor unrelated employees.

However, with the good also comes the bad. Often, personal issues invade the business environment, and arguments that take place at home can affect productivity in the workplace. If parents are running a family business, they may feel obligated to employ their children and refuse to fire them even if they don't perform their jobs well. In addition, some family members who see each other every day at work can begin to lose their personal connections and relationships.

The keys to success

There are ways to draw from the advantages of family-owned businesses and learn to handle the disadvantages. The following tips for successfully running a family-owned business are found on www.entrepreneur.com:

• Make sure family members know they need to behave as employees when in the office. No special treatment and petty arguments should take place.
  
  
• Have a trustworthy outside source function as an adviser or consultant. Someone outside the business often can have a fresh, less biased view of situations and will stay out of family issues.
  
  
• Set aside the dream that the family business will be perfect. There will be hard times, disagreements and difficult decisions to make.
  
  
• Make sure everyone communicates. Have an in-depth discussion about how every detail of the business will work, and make sure family members have a clear vision of what their specific roles in the business will be.
  
  
• If a family member isn't pulling his or her own weight, be sure to talk to them before the situation gets out of hand. If the family member's lousy work ethic persists, it may be time to let the family member go. Sometimes, business is strictly business.
  
  
• Give something back, and connect with your community. A family that works together for the good of the community learns family values. It can bring family members closer together and strengthen the relationship between the business and community.

Recognizing the strengths and weaknesses of a family-owned business and striving to create a business environment that works could save your business—and family.

Krista Reisdorf is associate editor of Professional Roofing magazine.