Every family has its share of issues. Combine the emotional elements of family relationships with the demands of running a business and it's no surprise that turmoil is a common outcome in family businesses. However, with the right approach, you can help keep your family business free from explosive situations. A well-managed family business boasts numerous benefits, including:

1. Decreased start-up costs.
2. Potential tax savings.
3. Employee loyalty.
4. A shared vision.
5. A long-term commitment to success.

Action Steps
The best contacts and resources to help you get it done

Outline job qualifications and requirements

Giving a family member a job simply because they're a relative is sure to create problems within your organization. Without proper qualifications, family employees are doomed to fail, creating tension and frustration. Avoid trouble by insisting that family members be qualified for their jobs with the proper education, training and experience. And hold them accountable for their job performance.

I recommend: The Job Results Management Institute provides forms that can help you pinpoint job qualifications, conduct performance reviews and measure performance. Find performance measurement resources from the Zigon Performance Group.

Define roles

Snuff turmoil by giving family workers clearly defined roles within the company. By outlining the specific parameters of each person's job, your family employees will understand the scope of their responsibilities and will be less likely to tread on each other's toes.

I recommend: SBA.gov provides tips on how to write a great job description. Get a look at some common duties included in various job descriptions in Monster.com's job profiles.

Compensate fairly

Just because someone is family doesn't mean they should be paid an exorbitant salary. This can lead to tension among the ranks of your non-family employees.

I recommend: Use Salary.com's free Salary Wizard to find average salaries, including bonuses, for dozens of job categories. Job valuation reports that give you a complete look at salaries, bonuses and raises for a variety of positions are also available for a fee from Salary.com.

Schedule family meetings and retreats

To make sure that all family members are on the same page in terms of business strategies, operations and future plans, hold regular family meetings. Consider an annual retreat to encourage family bonding, which plays an important role in the ongoing success of a family firm.

I recommend: The Family Business Consulting Group, authors of Family Meetings: How to Build a Stronger Family and a Stronger Business, offers family business meeting resources to ensure that you get the most out of your meetings.

Select an advisor or consultant

Since family enterprises face unique challenges, it may be beneficial to hire a family business expert as an advisor or consultant. Outside advisors can assist you in making sound business decisions while taking into account the emotions and personal relationships involved in a family endeavor.

I recommend: The Family Business Consulting Group outlines the benefits of working with a consultant. Review questions to ask a potential advisor at the Family Firm Institute, which also offers links to consultants who specialize in a host of family business topics.

Create a succession plan

A succession plan can help ensure the smooth transition of your business to the next generation. By choosing a successor and communicating your succession plans with all family workers, you can avoid power struggles.

I recommend: SuccessFactors.com offers success management software and succession planning Webinars. Familiarize yourself with the documents necessary for transferring the business, such as buy-sell agreements.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  In spite of your efforts to keep the peace, conflicts may arise. Your best bet is to deal with them head on rather than hope they go away on their own.
• •  Encourage family members to keep business and personal lives separate.
• •  Bonuses and incentives should only be given if predetermined objectives are met.
• •  Non-family members performing the same work as family members should be paid equally.
• •  Provide opportunities for advancement for non-family employees to avoid frustration and improve employee retention.