Expert Responses

The main pitfalls to avoid within the family business are summarised below:

Emotion within a family business can sometimes cause issues
Bringing family issues to work or taking work issues home. Distinction between work and family is important. Consciously working to limit the impact of family relationships is also key

Icebergs – there may be hidden conflict
The cause of friction or disputes may not be easily identifiable or explainable and it may well be that conflicts that arise during the day are as a direct result of issues or concerns between family members that are personal and totally unrelated to the business

Not implementing or following through agreed actions
Quite often in family businesses, the family members may think they can do it better and you may end up with everyone doing things their own way rather than a consistent company way – although this isn’t just limited to family businesses!!

Recognising when skills are required that the family members can’t provide
Acknowledging limitations of skills – that you need to employ to get those skills. This can be confrontational.

Taking on different opinions & perspectives
A non-family member may challenge the status quo. After multiple generations, things may be done a sepcific way because they have always been done that way – not just because it is the best way now.

Employing or continuing to employ family members just because they are family members
Rather than employing the right person for the job family members are employed who may not have the right skills for the job.

Potentially a lack of planning for the future – this is multi-faceted
One example is that family members may see the business purely as a way of funding their lifestyle, rather than funding the future growth of the business. Planning for cash to family members is important. Planning for the management succession of the business, as well as planning for ownership succession. Family business may also be more organic than strategic – is the current management actively looking to grow the business & how?