Many say there are no better people to rely on than your family. This may be true in many cases but have you ever considered the reasons why the remaining family-owned businesses fail?
Starting up a business is like any endeavor, it has advantages as well as disadvantages which play a critical role in the success of the company and weighing them first before finalizing your decision is best to avoid bankruptcy or worse—broken family ties.
The business world is usually seen as a serious and “heartless” means of earning. With that said, doing business with family could either make or break this common notion.
1. Businesses whose higher officials are related tend to be smaller because of its generalists’ perspective. Since all members of the family do not always have the same line of work or field of expertise, family-owned businesses usually deliver a generic brand to accommodate most of the kin’s interests.
2. Bringing family into a business have a tendency to make other employees feel part of the family. Family-oriented companies usually treat their staff like family and therefore, keep their best interests at heart while striving to earn more for the company.
3. Trust is engraved in family relationships. Having family members as business partners usually deliver automatic loyalty and support throughout your road to success.
4. Owning a business with family members also provide you with a comfortable social setup. Official meetings need not feel too serious. You can have a talk about business with your relative-slash-business partner over a cup of coffee or even while you go for your regular workout on the gym.
5. When working with your kin, you are aware of the personality of those you’re partnering with contrary to what the setup may be if you hire someone from outside the family. This setup would also give you the advantage of knowing how to handle the people you’re working with.
Whatever endeavor you may take, there will always something that can make you think twice about undertaking it. These disadvantages are also present in family-owned businesses. Among these include:
1. Leadership can be an issue especially if you are partnering—meaning you permit equal decision-making powers—with your relative. Also, your business is running on your mutual trusts with each other which can run deep. This may sound positive in a way but if you take into account possible disagreements and contrasting ideas—not to mention personal bouts, this can become a detrimental factor to your business.
2. You cannot fire a relative—at least not without breaking family ties as well. This has happened numerous times in some family-owned businesses and it doesn’t end well for the proprietors.
3. Meanwhile, if you do not take action for the betterment of your company because you are holding back from delivering sanctions due to your family ties with an employee, it would be like sacrificing your entire business to save the relationship. It’s a lose-win situation, leaving you with the difficult decision of choosing between family and business.