They say it takes a village to raise a child and you could say the same about running a family business. So how do you raise it to be a successful adult with strong foundations and good prospects?
With more than 67 per cent of Australian businesses being family run, there’s a lot of us who know what it’s like to work within a labour of love.
So is there a special formula that sets up a family business for success? We asked four Australian family businesses and the co-founder of Prospa, Australia’s number one online lender to small business, what they’ve learned.
1. Clearly define who’s who in the zoo
Kim Tyrer is the CEO of Galafrey Wines in Mount Barker, Western Australia. Her late father Ian established Galafrey Wines back in 1946, and the family legacy has continued with Kim at the helm, alongside husband Nigel and her mother Linda.
Her best advice about working in a family business centres around establishing clear roles: “We re-did our business cards many years ago and this caused the biggest argument as everyone wanted to be the GM. And in a lot of ways that is the most difficult thing in a family business to navigate because everyone is a manager and leader.
“Roles are very important. We quickly divided up everyone’s roles which plays to their strengths, and everyone stays in their lane. This is why regular meetings are important because you end up with independent people working away in their lanes, but you need to communicate to the other lanes so that all the lanes are moving forward in the right direction.”
2. Treat everyone fairly (Mum included)
Mother-and-son duo Michelle and Hayden Brass are the founders of health and wellness brand Zea, that sells natural relief products featuring the little-known Tasmanian-based therapeutic Australian Kunzea Oil.
Hayden tells Kochie’s Business Builders that treating every member of staff equally is a core value of Zea.
“Our best advice around this is to ensure that everyone has a clear and defined Position Description and Employment Contract,” he says. “Everyone gets paid a salary and is treated like our other employees. As family, we are each other’s biggest champions, but as we’ve grown and taken on other employees, we ensure that everyone is treated fairly and equitably.
“We also make sure that in a work setting that we are not prioritising someone’s needs or requests just because they are family. With a wider team, we honour each individual regardless of whether they are a brother, sister, or mother. It has to come from a place of equality.”
3. Communicate with purpose
Carmen Ellis and sister Sarah Cullen run ecotourism business Majestic Whale Encounters, hosting small group adventure tours in far-flung locations.
“We talk on a daily basis, usually first thing in the morning while it’s fresh in our minds,” Carmen tells us. “We discuss everything that will need to be completed that day and go through the calendar for what needs completing by the end of the week. Our meetings are not totally structured, as the nature of our business in tourism is very fluid and things change on a constant daily basis, even more now with the difficulties of COVID.”
Cinzia Cozzalino, who runs organic smoothie booster brand Smoothie Bombs with her daughter Lana, says online platforms help their team communicate best.
“We use an online workspace called Notion to help with organisation and communication,” Cinzia says. “We have our weekly meetings where we plan what needs to be done and who will be doing each task and we have it written down to refer back to throughout the week. We communicate over the platform – even if we’re in the same room – because it helps keep ideas and plans out of our head and puts them down for everyone to see and collaborate on.”
4. Choose your boundaries between family and work
“It’s really tough to set boundaries in a small family business, especially when you live together and run an eCommerce store that’s open 24/7,” says Cinzia from Smoothie Bombs.
“The key is to prioritise rest. It’s easy to just keep going and going and going, but eventually that leads to burnout and decision fatigue. Having clear rules is an easy way for everyone in the family to separate work life from home life, for example, no work before 9am or after 7pm. This allows for family time and relaxation.”
Kim from Galafrey Wines has found a different way to balance her home and work life: “My boundaries are very blurred between family and business, and I made a conscious decision to have it that way. It suits me, as I feel I have two full-time jobs as CEO and Mother. I live where I work so to come to the house for lunch and put on my washing just helps me get through the day with both jobs of business and family. My office is in my house, but it is very mobile, allowing me to work away.”
5. Don’t try to be an expert at everything
“This can be very important as you can’t both be an expert at everything,” says Carmen from Majestic Whale Encounters. “It is definitely worth your while contracting out certain aspects of the business. For example, neither Sarah or myself are web designers or web developers and so we pay a professional to do this for us. As the website can say so much about a business and can be the difference between gaining a customer or losing one, it needs to be the best it can be and better left in the hands of the professional. We have also hired outside help for accounting, PR and before COVID came along, we hired guides and also admin assistance.”
Hayden from Zea agrees: “As much as we’d love to be able to do it all ourselves, there’s no possible way we can. Getting outside talent in really helped super-speed our growth and allow us to kick even more goals a lot faster.”
6. Get on the same page with your business goals
When it comes to investing in the family business, bring all financial decisions back to ‘the why’. That’s the advice of Beau Bertoli, co-founder of Australia’s leading online lender to small business, Prospa.
“At Prospa, we talk to family-owned businesses every day about their biggest pressure points and how we can help alleviate these with flexible funding solutions,” Beau tells Kochie’s Business Builders. “The businesses that benefit most are the ones with the clearest ideas about their business goals and how funding can help get them where they need to be.”
“So, for example, if your business goals are more immediate you may require a loan for a more short-term need like making repairs or staying on top of cashflow.
“If your business goal is growth or expansion, you may come to a lender like Prospa for something like increasing stock purchases or hiring staff to meet demand.
“In family business, this means making sure you and your mum, your dad, your partner, your son, your daughter – whomever you run the business with – is on the same page about decisions around business growth and what you need to get there.”
7. Succession planning is successful planning
As Cinzia from Smoothie Bombs says, “It’s pretty vital to have a business plan that outlines your five-year goals and what it might look like if someone leaves. In a small family business you should have that chat every now and then to see where everyone stands.
“You should have systems in place so that if someone does move on or retire, their job can be taken over by someone else. We do this by writing down all the procedures in a manual that anyone can follow.”
Is your family business the next success story?
For the fourth year running, Kochie’s Business Builders is opening up nominations for our Australia’s Favourite Family Business competition, from August 30 2021. The winner will earn the title of Australia’s Favourite Family Business, be featured in a segment on our national TV show and a cash prize of $2500, thanks to our competition sponsor Prospa.
Visit our Australia’s Favourite Family Business page for more details.
If you’d like to know more about Prospa’s flexible funding solutions, visit prospa.com. Prospa offers small business loans of up to $300k. You can apply online within 10 minutes, with a fast decision and funding possible in 24 hours.
This article is brought to you by Kochie’s Business Builders in partnership with Prospa.
Feature image: Cinzia and Lana Cozzolino from Smoothie Bombs.
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