Managing family dynamics: People & Companies

Lots of machine shops, including mine, are family-owned businesses and share a unique ownership arrangement. This can make the experience of operating a shop interesting, challenging, and, hopefully, rewarding. Family-owned businesses are an important part of the U.S. economy and often involve multigenerational ownership. They are a testament to the American dream.

With so many machine shops being family owned, interfamily relationships directly affect their success or failure. With sizable financial investments at stake, it’s vital that family members understand their roles and respect their shop’s chain of command, because any infighting can put serious strain on the relationships inside and outside of the company. That’s not a good way to experience family life.

Many ways to structure a family-owned shop exist, and the family, aided by a reputable lawyer, should determine the best working arrangement. Many factors can influence a shop’s legal structure, such as whether it is incorporated, whether the property is leased, rented or owned, and the formality of the ownership agreement. Regardless of the exact legal arrangement, a family-owned shop is more likely to succeed if family relationships are solid and supportive.

Unfortunately, that’s not always the case. The managers of a family-owned business must consider the relationships involved and avoid jeopardizing the quality of life of the family members. Don’t risk family relationships over a business partnership.

Machine shops continue to struggle with a lack of qualified employees and can’t operate without loyal employees from outside the family. However, some employees are ambitious and need a reason to continue to devote themselves to a company, especially when it’s sewn up as a family enterprise. The more ambitious ones get restless if they don’t see a clear path of advancement. This often leads to employees leaving and becoming competitors. While this is unavoidable in some cases, all family-owned shops must recruit, cultivate and retain nonfamily employees and give them a reason to stay with the company.