Family Run Businesses
Many businesses are family run businesses. Usually, but not always, a parent starts a business. As the children grow up, the parent start grooming the children to take over the business. Eventually the family run business is passed down from one generation to another.
There are valuable benefits for families starting or running a business in the sense that there is a greater trust between family members. Family members in family run businesses usually have the same customs and beliefs which make communication between members in the business more relaxed.
A natural pecking order exists between family members which assist with managing each member’s roll in the business. Loyalty to the family provides pride and purpose to the family as a whole, which can make the family run business success a priority for all. Family members also tend to stick together and pull together, especially during hard times and this fact gives the family run business a competitive edge.
In times of hardships, family run businesses survive because they are willing to make sacrifices. They will work for less money or defer receiving payment until the business has survived the crises.
But problems also arise in family run businesses and these problems should be dealt with quickly and effectively if the family run business is to survive. It can happen that a family member does not participate in the management or running of the family business. This person (say the wife with a small baby) might not understand that the business can be emotionally draining and stressful to her husband due to the fact that she does not spend time working in the business.
If the husband also has to deal with an unsporting wife who becomes resentful towards the business it can complicate relationships, cause divorce or hate between members in the family-run business.
For the sake of harmony it is important to include a family constitution with policies that guide the family’s relationship within the business. The family constitution should include rules on how to deal with family conflict and other issues that may arise. It is wise to have mechanisms in place where family members can contribute their views without being ostracized.