Setting up an ecommerce business comes with its own set of challenges and opportunities. Along with the intricate business strategy and planned details, you most certainly need a team of skilled experts who can take care of the technical aspect of your site.
Running an ecommerce business, and ensuring that all customer orders are dispatched on time and paid for, accordingly, is a trying ordeal and it is great to have as many hands on deck as possible. Some entrepreneurs include their friends in their business to help them take care of the different business operations, while others prefer to set up and manage a family run ecommerce business, which will prove to be an asset for all.
A family ecommerce business is a great way to setup an enterprise where everyone can contribute to take the family business forward. While a family ecommerce business is indeed a great opportunity for many, there are still some things which you will need to keep into account to make sure that your venture is a success. These things are,
Determine Business Structure
One of the most important elements of a business is its type of structure. In Australia, businesses can be a sole proprietorship, partnership, a company as well as a discretionary trust or family enterprise. The family or discretionary trust business structure is one which is ideal if you plan on setting up an ecommerce enterprise.
This business structure ensures great flexibility for the distribution of income, and also holds your business qualified to enjoy different tax benefits. It depends upon the structure details you decide, and you can split the family income with all the members who can gradually become beneficiaries of the trust. Each member will have to make tax payments on the amount of income they receive.
To run a family business, you will need trustees who will oversee the fund distribution.
Protect the Business from Family Issues
The biggest problem in a family owned ecommerce business is that it is liable to suffer from personal skirmishes. The effective way to deal with this problem is to have the business in the hands of the trust and not individual family members. This way, many issues can be resolved in a fair way.
Have a Future Plan in Mind
Since yours is a family owned ecommerce business, what plans do you have for the future of the enterprise? Who will succeed you in the position? Will the business be sold or just liquidated on the market? What do you have in mind? It is essential to have an exit plan set in advance for your family owned business.
Set up a plan for easy transition, whether it involves passing on the torch to another family member or selling the family enterprise after some time.
Define Business and Family Organised Plans
Make sure that your business future plans consolidate with those of your family. On an average, family businesses have a planned out strategy for a period of 25 years or so, where all family members have a clear idea of what they want and what they will get through their business endeavours.
Your family should have a set business plan for their ecommerce venture, and ensure that their personal objectives are suitably translated into their business goals.
Have a Business Rulebook
Just as any regular ecommerce business would have a definite set of rules, so should your family business. The plan should outline the exact remuneration and benefits of each contributing family member, to avoid any confusion and issues in the future.
The remuneration will be decided on the basis of services offered by each member to the business. If one family member looks after the technical support of the ecommerce system and has designed the web store features, they are entitled to a handsome salary compared to others.
Just keep these 5 points in mind while setting up your family based ecommerce business and reap the fruits of your labour.