Challenges for Family Businesses

1.  Family Feuding

Family businesses are often face with internal conflict that typically arises from the inability to separate business and personal lives.  If the issues continue to be unresolved it will be impossible to define and achieve common goals for the business.

2.  Nepotism

Hiring, promoting and paying someone based on a familial relationship rather than on their qualifications and ability to do the job is a recipe for disaster.

You will find that non-family membes will be demotivated and lose their desire to work for your business.  Family members can become complacent because more often than not they will not face consequences for non-performance.

Ultimately, nepotsim does not empower your employees.

3. Letting Emotions Run the Business

Separating your emotions from the business is never easy especially if it involves managing a family member.  Be aware that if you let emotions interfere with your business, it can make you appear weak to your employees and customers, and can affect your ability to make sound business decisions. On the other hand, if you are insensitive you may appear cold and unapproachable.  You will need to get the right balance of emotion needed based on the dynamics of your business environment.

4.  Losing Non-Family Employees

Most employees want to advance within a company.  Unfortunately, in most family businesses there are often limited opportunity to get promoted because family employees can hold most leadership positions within the company.  Without this opportunity to take on a management role, many talented and ambitions employees will move on.

It is important to understand that every business needs a good mix of people to help the business grow and what non-family employees do are add balance to the company as they can view the business from an unemotional position.

5.  No Succession Plan

There will come a time in every business when someone retires, leaves or passes away.  It is so important to have a plan in place for these eventualities .

(ref:   http://familybusiness.about.com/ )