Five Challenges Facing the Family Business
Anyone who starts a business will have plenty of hurdles to overcome. The same could be said for starting a family. What happens when you combine the two? Here are five challenges one might face while running a family business:
Employees of a family business often get the job because they are related to the owner. It is called nepotism. While it may or may not be true, this is something all family business owners can look forward to being accused of. It affects everyone differently. An employee might feel the need to prove him or herself in the eyes of non-family members. Leadership will have to make an extra effort to enforce policies to ensure things are fair for non-family members. Worse yet, there can be pressure to hire family members who lack the basic skills and experience required for a position.
Keeping things from getting personal in a family business can be particularly difficult. A policy should be put in place that only business matters are to be discussed during work hours. Unfortunately, the physical, emotional and financial problems of family members constantly threaten to interfere with day-to-day operations.
Personal also often equates to informal. There is nothing wrong with a laidback atmosphere. However, informal can also mean a lack of documentation, policies and defined strategy and goals.
A family is more likely to be passionate about the business, but what about the next generation? What about the one after that? A family business may combine multiple generations of workers, but there is no guarantee that each one will come to it with the same passion or perspective. The most important role that successors play is in the succession plan, a vital aspect that is often neglected by family businesses.
If all the passion for the business is with the family, what about the non-family employees? Are they invested? Do they see a future with the company? If they feel that greater opportunities exist for those who are a part of the family, they will likely grow tired of the culture and move on. If that culture is laid back, there might be a lax approach to training. In that case, any employee will be likely to have a short tenure.
Businesses need to have external views of their company as well as the competition. Similar upbringings and life experiences can equate to a uniform view of a family business. That is why many family businesses hire outside consultants. Above all else, family business owners must be able to accurately assess the value of the business as well as what contributes to or detracts from that value.
If you have any questions regarding the operation of your family business or any other business, contact this office for an initial consultation.
The Law Office of H. Benjamin Sharlin LLC
is owned and operated by H. Benjamin Sharlin and serves all of Mercer County, New Jersey and the surrounding areas. Mr. Sharlin is a bilingual Spanish-speaking attorney who vigorously represents the interests of all his clients.
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