When I first met Sally she was in the verge of giving up on her business. She had tirelessly worked for over 10 years to make it profitable. She had beaten all the odds to maintain her profit margins year after the year. Her business now was sinking though she never got to know why. As we were discussing the issue, a few things came up. The business was doing well until the time Bob, her husband came in as a business partner.
Both were to run the business on trust basis. The agony on her was unrelatable. Her years of sweat were slowly being reduced to ash. The question she was asking herself is what happened? Where did she suddenly go wrong? To answer a few of the many questions she had, and may be many individuals are going through is this blog. Here are the tips to help you overcome this now or in future.
Here are the unique lessons you can learn from this blog post:
- How do you avoid business collapse as a family?
- How well should one maintain her finances? What is the best approach to a family business?
- How do we sort out the differences that money matters bring?
In order to accomplish this, the following should be adhered to;
- Let each partner run his /her business
- This will ensure that the one in charge of the business is solely responsible. Most of the conflict comes as a result of blame game.
- Disagreement on the best way to run a business results in collapse.
- As long as only one person runs the business it is easier to account for.
- Accountability is the key thing in running any business.
Chip in financially
This is the only way the two parties may come together to uplift one another. In case one party business is not doing well, it is necessary to boost one another. This doesn’t mean that the running of the business will shift. It is just for financial support to avoid fall of business.
Give account of progress
This will ensure that the other partner is aware of what is happening in each business. The aim of this is not to take charge of your partner’s management. It is solely to enable each other understand the business better. In case one may not be able to operate in a day everything moves on well.
Keep records
Every business needs account of records. At the end of day one need to figure out how the business is doing. This can only be achieved through thorough recording of day’s activities. This gives smooth flow of business. Also it enables one to know when to replenish stock.
Related: How To Run A Successful Business With Your Spouse Without Divorcing
Reconcile the accounts
Books of accounts are a must for any business. Therefore make it a routine to have proper controls. The reconciliations may be done daily, weekly, fortnightly or monthly depending on the business nature. This is every business watchdog to curb any loopholes in the business. If need be involve a professional.
It is our business at the end of day
It ensures proper business management in that each partner is aware of the activities going on. Even if not fully running the business, at least the slightest idea. This way in case of challenges it is easily solved. Have an open mind and ready to ask for guidance. Also it becomes a platform to table the challenges and strengths of the business. Any improvement should be done together.
It is a way of diversifying risks
The fact that each partner runs the business it is a way of mitigation of risk. This is so because if one business collapses the other continues. Thus, the risks are diversified. The aim is to stabilize the business. Losses in a business are inevitable. If the same happens the family remains stable. Therefore, in case one business collapses the other is intact.
This way the family business conflicts may be resolved. It is our money, our business fights will soon elapse. It is worth a trial. Just like in jobs segregation of duties is always important. It is good to know your stand in every idea. This ensures each person is responsible for progress or collapse if any may be experienced. Also it enables one account for the cash flow.
About Author
Ndumia Rose is a Kenyan who is passionate about financial matters especially in marriage institutions. She can be reached on rozndush[at]gmail[dot]com
