For most people, running a family business makes perfect sense. Family members can work together to build a legacy from scratch. They can work like clockwork and help each other by sustaining a profitable business. But then, no family business is perfect. Many things can go wrong, and numerous challenges can ruin both family relationships and the business.
A family business is defined as a business with at least two members who own and operate the company. While running a family business has its own perks, it does have a set of drawbacks. The following are some things that can kill a family business.
Bringing Family Issues to the Workplace
No couple who started a family business could have predicted they would separate after a couple of years. If the owners are now at the brink of a divorce, it is easy to take their personal issues at work. If one can’t separate their family problems outside of the workplace, this can ruin their relationship and bring more drama into the family business.
Note that it is a must that couples avoid bringing up their issues at work. For one, this is not relevant to your business operations. Second, even other employees can get distracted, which can hinder the efficiency of the operations.
As much as possible, communicate with your spouse outside of work. If it is not possible to find common ground, consider choosing a mediation before litigation. Who knows? You might even get to save your marriage and your business for doing so.
If a divorce can’t be stopped, talk it out and see if you can continue as business partners. If not, then it is time to find other ways to keep the business alive post-divorce.
Not Holding Relatives Accountable
Everyone can make mistakes in business. But for most family businesses, many families try hard not to hurt their family members’ feelings. This is even if they should be held accountable for their quality of work. Failure to hold family members accountable only shows you are practicing favoritism.
Each employee, relative or not, should know the consequences for non- or poor performance. If you don’t treat every equally, your other employee’s morale will get hurt, and they will lose confidence in the business. You can end up losing your best talents just because you blindly allow a relative or two do everything they want in the company.
A Lack of Succession Planning
There will come a time when high-level executives will retire for different reasons. One can’t simply expect that a relative or two will be willing to take the challenge and accept the new role. Note that not all people would love to take charge of their family business after their parents retire.
According to a study, up to 47% of business owners still don’t have a successor in their senior years. To maintain peace within your organization and ensure its longevity, plan the succession as early as possible. Consider developing superstar employees early on so you can more time to gauge which ones will be a better fit in running the business.
Once you plan your succession, put all agreements into writing. This can help get rid of power struggles in case something unexpected happens. This will give you peace of mind knowing your successor of choice can take charge.
Seeking Advice from Select Family Members Only
Rarely will every family member involved in the business will provide honest feedback and advice. Some are too hesitant to turn down other relative’s idea. They want to save their relative from heartache by keeping quiet.
Other times, your relative may insist on an idea even if it stirs trouble within the business. One may find it difficult to find the courage to tell them off. There can also be times when one will shut down a brilliant idea simply because they are not the ones who came up with the idea first.
To find common ground, hire different professionals outside of the organization. Having a team of professionals outside of the organization can help you make better business decisions. You can hire professional services depending on your business needs.
For instance, a financial advisor can help assess your business model’s viability. With their expertise, they can help craft personalized strategies to boost your business profitability. With a pro’s advice, you can make decisions based on facts and not simply because a family member told you to do so.
Many other things can ruin your family-business in a snap. This can include failed relationships, favoritism, failure to plan a succession plan, and seeking advice from select members. If you don’t want to blow up your brand, you must avoid these things from happening.
