How and Why to Define Roles in Family Business

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How and Why to Define Roles in Family Business

How and Why to Define Roles in Family Business

Roles in family business can get murky, especially early on. Starting out, it can be an all-hands-on-deck situation with everyone scrambling to do whatever needs to be done. But it’s important to outline a shared understanding of the family business structure if you’re hoping to operate and grow effectively in the long run.


Benefits of Defining Roles in Family Business 

Family businesses are often more loosely structured than non-family businesses. This is because families have a foundation of trust and communication that can make up for confusion caused by unclear roles. Plus, family members have a personal commitment to the business, which makes them more willing to step in wherever they’re needed. This is one of the great advantages of family businesses.

However, relying too heavily on this natural advantage can make things harder in the long run. Clearly defining roles with job titles and assigned responsibilities ensures that all important tasks get done. It also makes the team more efficient by making sure no job gets done twice.

And for family members who need to list the family business on a resume later on, having a clearly defined title and set of responsibilities is helpful for securing a new position. 


Organizing the Family Business by Responsibilities

When deciding how to assign roles in family business, it’s helpful to start by looking at the primary responsibilities that must be covered by every business. They can be divided into six umbrella categories:

1 – Strategy

  • Setting long-term goals
  • Establishing business plan
  • Product development / Deciding what to offer and how

2 – Staff

  • Recruiting
  • Hiring/Firing
  • Writing job descriptions
  • Training
  • Providing feedback

3 – Financial

  • Establishing budgets
  • Financial forecasts
  • Invoicing customers and paying suppliers
  • Payroll
  • Filing taxes
  • Organizing current and historical financial documents

4 – Daily Operations

  • Overseeing general employees
  • Evaluating processes for efficiency and effectiveness
  • Deciding what equipment and technology to use
  • Problem solving
  • Tracking inventory and stocking items
  • Creating employee schedules

5 – Sales & Marketing

  • Digital marketing: social media, email marketing, website management
  • Other marketing: print, press releases, radio advertisements, billboards, flyers
  • Sales: In-store, over phone, by email
  • Branding: visual signatures like logo and colors, tone and voice of business
  • Staying on top of industry trends

6 – Customer Service

  • Customer care
  • Resolving customer issues

Common Structures and Roles in Family Business

If a company is large enough, each of these areas of responsibility will be tasked to a different member of leadership with a team of employees under each of them to carry out the tasks in detail. Of course, that’s not possible for most family businesses, especially when starting out.

But no matter the size of your business, the goal should be to distribute responsibilities as evenly as possible across leadership and staff.

We looked to some of San Francisco’s most common family business types to craft examples of effective family business structure. Even if your industry isn’t included, we hope it gives you a better understanding of how roles can be effectively divided.

Note: we’ve outlined a bookkeeping/accounting position for all businesses. However, it’s common in family businesses for this position to be performed by an owner or manager.


Family Business Structure Examples

Family Business Structure Examples Restaurant

RESTAURANT

OWNER

Strategy: Setting long-term goals, establishing business plans, product development

Staff: Hiring/Firing, providing feedback

Financial: Staying informed on finances of the business

Daily Operations: Staying informed on daily operations

Sales & Marketing: All marketing and branding, staying informed on sales

Customer Service: Staying informed on customer experience

All major business decisions have to be approved by the owner

BOOKKEEPER / ACCOUNTANT

Reports to Owner

Financial: Budgeting, financial forecasts, invoicing/paying out invoices, payroll, taxes, organizing financial documents

HEAD CHEF

Reports to Owner

Strategy: Product development for new foods

Staff (in Kitchen): Influence over hiring/firing, writing job descriptions, training, providing feedback, scheduling

Daily Operations (in Kitchen): Perform daily tasks necessary for core business operations (cooking/cleaning), evaluating processes, influence on equipment used, problem solving, tracking and stocking inventory

KITCHEN EMPLOYEES

Chefs, cooks, dishwashers. All report to Head Chef.

Daily Operations: Perform daily tasks necessary for core business operations (cooking/cleaning)

FRONT OF HOUSE MANAGER

Reports to Owner

Staff (Front of House): influence over hiring/firing, writing job descriptions, training, providing feedback, scheduling

Daily Operations (Front of House): oversee daily operations, evaluating processes, influence on equipment used, problem solving, tracking and stocking inventory

Sales & Marketing: In-restaurant sales

Customer Service: Customer care, resolving customer issues

FRONT OF HOUSE STAFF

Hosts, servers, bartenders, food runners. All report to Front of House Manager.

Daily Operations: Perform daily tasks necessary for core business operations (serving food/drinks)

Customer Service: Customer care, resolving customer issues

Family Business Structure Examples Retail

RETAIL

OWNER

Strategy: Setting long-term goals, establishing business plans, product development

Staff: Hiring/Firing, providing feedback

Financial: Staying informed on finances of the business

Daily Operations: Staying informed on daily operations

Sales & Marketing: All marketing and branding, staying informed on sales

Customer Service: Staying informed on customer experience

All major business decisions have to be approved by the owner

BOOKKEEPER / ACCOUNTANT

Reports to Owner

Financial: Budgeting, financial forecasts, invoicing/paying out invoices, payroll, taxes, organizing financial documents

STORE MANAGER(S)

Reports to Owner

Common in larger retail stores or stores with multiple locations to have a manager for each department/location.

Staff: Influence over hiring/firing, writing job descriptions, training, providing feedback, scheduling

Daily Operations: Overseeing daily operations, evaluating processes, influence on equipment used, problem solving, tracking and stocking inventory

Sales & Marketing: In-store sales

Customer Service: Overseeing customer care, resolving customer issues

STORE STAFF

Cashiers, stock clerks, baggers, etc. All report to Store Manager.

Daily Operations: Perform daily tasks at the core of business (stocking shelves, checking out customers, cleaning)

Customer Service: Customer care, resolving customer issues

Family Business Structure Examples Salon

SALON

OWNER

Strategy: Setting long-term goals, establishing business plans, product development

Staff: Hiring/Firing, providing feedback

Financial: Staying informed on finances of the business

Daily Operations: Staying informed on daily operations

Sales & Marketing: Overseeing all marketing and branding

Customer Service: Staying informed on customer experience

All major business decisions have to be approved by the owner

BOOKKEEPER / ACCOUNTANT

Reports to Owner

Financial: budgeting, financial forecasts, invoicing/paying out invoices, payroll, taxes, organizing financial documents

SALON MANAGER

Reports to Owner

Staff: Influence over hiring/firing, writing job descriptions, training, providing feedback, scheduling

Daily Operations: Overseeing daily operations, evaluating processes, influence on equipment used, problem solving, tracking and stocking inventory

Sales & Marketing: In-store sales

Customer Service: Overseeing customer care, resolving customer issues

RECEPTIONIST

Reports to Salon Manager

Sales & Marketing: In-store sales and over-the-phone sales, managing social media account

Customer Service: Customer care, resolving customer issues

STYLISTS / SERVICE PROVIDERS

Stylists, assistants, aestheticians, nail artists, etc. All report to Store Manager.

Daily Operations: Perform daily tasks at the core of business (salon services)

Customer Service: Customer care, resolving customer issues


Other Considerations for Defining Family Business Structure

A few more questions to address when assigning roles in the family business…

  • How many hours is each team member expected to work?
  • Where is each team member expected to work? Is it ok for leadership to perform some duties remotely?
  • Who fills in when someone is sick or incapacitated?
  • Should you outsource some roles when your family members lack the expertise needed? (Commonly outsourced roles include marketing, accounting, and technical support)
  • Who has the power to spend money on behalf of the business?

How Structured Do Roles in Family Business Need to Be?

While it’s helpful to designate clear roles in family business, that doesn’t mean there’s not room for flexibility. Having team members willing to step into roles outside of their primary responsibilities is a unique and advantageous trait of family businesses.

Roles also don’t have to match the examples here. It’s perfectly acceptable to craft responsibilities based on family members and employees’ natural strengths. Does your sister want to be bookkeeper, tech support, and manage social media? Great! Your son wants to work the bar but he’s also a brilliant business strategist? Don’t waste either talent.

When it comes to organizing the family business, all that matters is that it works.


More advice on family business practices…

Sustaining Family Business Communication During COVID

Succession Planning Best Practices for Family Businesses (Members Only)

Beginner’s Checklist for Getting Noticed Online (Members Only)

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