Family businesses can go to extremes: in some cases we will find some that are a clear example of success while others were a failure from the way they were planned.
The advantages family businesses have are plenty and those who are able to cope with its challenges can achieve business objectives in the long term.
Read on to learn about the advantages and disadvantages of family businesses that you can take advantage of, or that can be detrimental if you don’t realize it in time.
When you are a solitary entrepreneur, it is very complicated to plan something for future generations, since the intention of every businessman is to make his brand grow over time and his services or products cover more and more space on the globe.
One of the benefits of family businesses is the fact that the first generation can lay the foundations for the next one, as committed as it will be to morality and sentiment, to execute the plans that had already been foreseen, either the same or improved, taking care of the interests of their predecessors.
Long term planning gives an internal competitive advantage to family owned business, due to the fact that decisions are taken based on the future returns.
What it started as a small business, a long term plan has as an objective to convert it into a bigger business.
It may seem a little bland, but the reality is that when we hear that the work team is a family, we gain more confidence towards it because of its traditional values.
It is then much easier to reach a larger number of customers motivated by the trust that family can give.
When you have a company one of the most difficult points is to pass on the values that you have as owner to your employees, and many times this task is even more difficult when they have not been raised from home with the same values that led you to be in charge.
Running family businesses also means a posture of family values in the local market where it operates.
One of the advantages of family businesses has to do with the values that will have the team that has been raised under the same image and beliefs.
We can highlight responsibility, commitment, respect, the need for justice, and many others that can make a company stand out from its competition thanks to the work ethic.
Strong values bring business competitive advantage since there is an image that is built on them.
The commitment one has to a company that belongs to us is something that can never be compared to anything else, not even that of the most loyal employee.
As they always say, the captain is the last one to jump off the ship.
In times of crisis it is common that a large part of the team decides to leave to look for better opportunities, and while the business family owners are fighting for their dreams, others simply need their payments.
Among family owned businesses, desertion becomes much more complicated, so there is a great probability of union and efforts.
Another advantage of family businesses is that you know perfectly at least those people who occupy important positions, which makes it much simpler to trust them with their tasks and take them into account when making decisions.
Running family businesses rely on having in your team, people that either you took care and educate them, or with whom you grew up.
The attitude the family members have will be the one that show how the family business will run.
This is a problem that many families who do not work in the same place have, now come to imagine what will happen to those who also share at work. And is that work conversations do not seem to end with the schedule to be met.
It represents one of the biggest disadvantages of family businesses for the simple fact that it pollutes the environment. The family needs its shared time to go beyond work. Talking about personal issues, entertainment, among others, makes communication healthy and improves the family atmosphere.
If in companies it is generally recommended that there is no strong emotional bond between employees because this may cause some complications, imagine what can happen when that bond that unites them is also carried in the blood … It can be chaotic.
No family is perfect, there will always be those who do not agree, or who are angry about something, or even those who do not feel close to another member. The most advisable thing to do in these cases is always to take the time to eventually create an environment for reconciliation; something that cannot be done if you have to see each other 8 hours a day.
One of the most frequently seen disadvantages of family businesses is the lack of commitment. “It’s my parents’,” or, “It’s their dream, it’s not what I want for myself,” are often testimonials from those forced into a role.
For this point we will use an interesting example, and it has been said by Selena Quintanilla herself that she added her family members to the payroll so that each month they would receive a check corresponding to the earnings of their efforts, even when they had no role in the management of her image or brand.
In many cases, families are guided by their feelings and think that because they have something established they can all benefit from it. Not only is it only fair to benefit only those who have worked with it, but it can also end up draining money from the business.
This is one of the disadvantages of family businesses that we see in even the smallest ones, such as when there is a store and someone grabs cash from the till because they need to buy something.
Or maybe he feels that because he is a member he can get his hands in the administration unduly.
It is of utmost importance that the company’s cash flow, as well as any other cash reserves, be respected.
Every employee, regardless of position, should be able to count on his or her salary and manage his or her life with it so as not to compromise the company’s financial stability or create bad habits.
As anything in life, there are pros and cons of running a family-owned business.
But the answer to the question, will depend on your actual goals as an individual and your personal desires for your future.
Certainly, the statistics show that the businesses that have more longevity in our time are those where family members are involved since their creation and they are still shareholders of them.
If you have created a set of values of your own, and don’t have the same mindset of your family, then it is not a selfish move to go find a job by your own or even start your business.
And also, it will be ok if you are willing to keep up with running a business that was started by the founders and you are happy with that decision.
What will make worth the decision, is if the decision of working in a family-run business comes from a sincere and honest work.
Working or developing a business may become a boulder on the back if the individual is actually not enjoying the work, and doing it from a perspective of, “It has been what my family has done for years”.
Family conflict may appear, and family members may not be able to agree to your ideas always, that is why taking into balance the pros and cons is important so that it can help you to take decisions for a better future with a long-term business that reach out success.
One thing learned out from the Richest man of Babylon, is a part where it is mentioned about investing with family.
It is mentioned the case of the sister’s husband who wants to start a business and needed money.
The message of this part is as follows.
“Instead of wasting your money helping people who do not guarantee your return, it is better to invest it in a business where you are sure of your return.”
So, if the family business is already running and showing succes, and you can guarantee that the money you are putting in is going to be returned, then go ahead.
But if you are taking the decision based on feelings, and just to help out a family member without seeing first any sign that you are going to obtain a return, than probably it will be a bad idea.
This can be one of the disadvantages of a family businesses, because people can have this inner conflict of what to do and what is correct or incorrect even if it is family.
Doing business with your family should be ok, if both sides are already showing the signs of commitment and desire of success of the business.
Family and business sometimes is a complicated matter, so it would be better to invest something else rather than money.