How to Successfully Operate a Family Business

How to Successfully Operate a Family Business

Metro Island Mortgage was established in 1998 by Alfredo Zamora, himself an experienced professional in real estate and financing. Based in Puerto Rico, the firm has offices in several locations and is run by Freddy Zamora, who functions as the company president. The company’s growth has provided work opportunities to many people, including seven members of the founder’s family.

Family businesses comprise a big chunk of business enterprises, and they generate employment for many people. However, running such an operation requires planning, discipline and respect of the family relationships. For families that have to work together, the following tips come in handy for proper functioning.

Designate a leader

It’s crucial to appoint someone as the leader and allow them to have final say on issues. Doing this can avoid execution paralysis, which is often a damaging predicament when a committee of relatives have to agree on matters. Like many non-family businesses, a board can be tasked with selecting a leader with the appropriate skills.

No handshake deals

The use of formalized job descriptions, contracts and operating procedures helps to avoid the confusion and misinterpretation that comes with handshake agreements. To avoid any potential family conflict, ensure that everything — from disciplinary action to bonus payouts – is in writing.

It’s hard to fire relatives

In reality, they can, but it ends up creating rifts. There isn’t a foolproof way to avoid this, but you can reduce exposure by outlining expectations clearly and establishing reporting mechanisms that can help identify and resolve issues objectively.