Pros and Cons of Joining a Family Business

There’s a lot to be said for working with family, but it isn’t all good. Here are some of the pros and cons to consider before joining the family business.

Pros:

Sustainability

Family businesses are more likely to make better long-term decisions, taking the future of children, grandchildren, and great-grandchildren into account. They often contribute more to the communities of which they are a part. Community involvement is one reason people continue to patronize small family businesses despite the possibility that they might be able to save a few dollars at a high volume chain store.

Ownership

When people have ownership of a business through personal investment, whether financial, temporal, or emotional, they tend to work harder to make it succeed. Many family businesses, especially multi-generational ones, begin and are sustained by a passionate love of something. That passion is successfully communicated through the loving demonstration of skills to the next generation. One such example is Glenn Walton, who took up his family business as soon as he was legally able to do so. Whether it is caring for life-giving trees, or seeing the pleasure on a customer’s face while enjoying the results of fine culinary skills, business ownership begins with passion.

Innovation

Studies show that profit sharing results in higher profits. It also results in more innovation. In a family business, because pay is tied to profit, everyone in the business is more likely to always be on the lookout for new ways to increase profits. When pay is not tied to performance, workers have little incentive to do much more than the minimum amount of work required to remain employed.

Skill Set Diversity

Family businesses are usually smaller, and chances are that everyone in the family has covered for another family member at some time. That means that every family member has the opportunity to learn all the skills required to run a business, rather than just acquiring and practicing one skill set day after day.

Communication

One of the biggest problems business owners face is difficulty with communication. Family members know one another so well that they can often communicate complex thoughts, feelings, and ideas with a single glance, gesture, or just a few words and be completely understood. Learning people’s communication styles is often a matter of trial and error and sometimes those errors can be costly.

Family Loyalty

A big advantage of working with family is the stability of an environment in which everyone has a personal relationship and a stake in the success of the business. Sometimes it’s necessary to hire outside employees to fill vital roles. However, family businesses are less vulnerable to the potential disruption of employee loss. Family members have often been trained since childhood in every aspect of the business, and can fill in whenever and wherever they are needed.

Cons:

Personal versus Professional

When you work with someone you may have had an argument with at breakfast that morning, it can be more difficult to leave your personal life at home. Policies regarding resolution of personal issues during personal time must be agreed upon and firmly adhered to.

Motivation

When you work with family, it can be easier to take your job for granted, knowing that you’re unlikely to be fired. Since most of us have been trained to respond to the negative motivation associated with fear of job loss, it can be difficult to transition to a positive form of motivation that requires more self-discipline.

Objectivity

Sometimes when we love someone, it can be difficult to view them, and by extension, their job performance, objectively. That’s why customer feedback is even more important to a family business. It’s also a good idea to enlist an outside observer to make suggestions from time to time.

Succession

It’s a good idea to establish some objective criteria for succession, while recognizing each member’s unique talents and contributions, well in advance of passing the torch. While competition can serve to increase effort and improve performance, within a family, it can also lead to jealousy and resentment. An agreed upon set of skills, characteristics, and performance evaluations will help ensure a smooth transfer of power to those most capable of exercising it wisely.

With both advantages and disadvantages, in a family business, life really is what you make it.

 

Philip Piletic – Originally from Europe, currently situated in Brisbane, AUS where I work & live. My primary focus is fusion of technology, small business and marketing.

I love to share my experience with others by contributing to several blogs and helping others achieve success.

2017-08-09T07:31:52+00:00

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