The 5 Biggest Challenges Faced by Family-Owned Businesses

What are some of the challenges that family-owned businesses encounter? The article will discuss some of these challenges and how they can be overcome. Family-owned businesses have had to overcome their fair of challenges over the years. The top 5 of these include:

1. Lack of succession planning

One of the biggest challenges family-owned businesses face is deciding who will take over when the original owner retires. If you don’t want the business to be sold, a plan needs to be in place for management to step into the role. An entire family shouldn’t run a business, but rather a specific person should be selected for that purpose. When someone is chosen, they need to be adequately trained to step into their new role seamlessly after their predecessor has retired.

2. Pressure to hire from within the family

The family members who own the business may feel pressure to hire. This is a perfectly acceptable practice. However, they must find someone they believe will operate the business effectively, regardless of their background. It’s also good to hire an outsider when possible to provide an objective viewpoint into how certain decisions are made.

3. Conflict among family members

Conflict can be detrimental to a family-owned business if it is not managed effectively. The family members involved should discuss what the conflict is about and how to resolve it. If they can’t work it out, you can hire outside people who have the skills and experience required. When the conflict can’t be resolved, the best option is to sell the business or find a trusted outsider to run it.

4. Poor communication with employees and customers alike

Lack of communication is one of the biggest problems for family-owned businesses. If the people involved in running the business can’t effectively communicate with each other and with their employees, their growth will be impacted.
It’s important to make sure that you have systems that allow for greater communication and transparency among the people involved with your business. This will lead to a stronger brand and better financial results overall.

5. Involvement in business activities of non-family members, which can be detrimental to the family’s business.

In today’s world, family-owned businesses have to be concerned with Family Interference. Family Interference occurs when non-family members involved in the business try to influence family members through manipulation and deceit. This can be detrimental because it can lead to a loss of focus on the primary goal of the business. Family Interference can occur at any time; however, it is more common in the years leading up to and during business succession planning.

4 Keys To Small Business Longevity

Building a business is hard work. Holding a vision with passion and drive, crafting a business plan, and then having the tenacity to see it through can test those of us with even the most resolute attitude. As you set sail on your path to entrepreneurship, know that there will inevitably be ups and downs, and perhaps even periods of time where you are not seeing profit at all.

With dire statistics like “fifty percent of small businesses don’t make it past the five-year mark”, you must set yourself apart from those institutions that couldn’t stand the test of time. Put your nose to the grindstone, keep your vision and goals in the forefront of your mind, and read on to see how you can weather the “storms” and ensure longevity.

How to make your business stand the test of time
Following a simple formula for business, success is not enough; you must repeatedly take action outside your comfort zone to ensure that you change along with your industry. Take these steps to see the success that lasts:

1. Relentlessly focus on your customers
If you don’t have customers, you don’t have much. You likely got into your current line of business to make a difference in the world, but who are you catering to? Who is your target audience? Find out who they are, and then cater to their every whim and wish. Building a loyal customer base and then continuing to do outreach will ensure that no matter what the current economy is doing, you’ll come out on top.

2. Avoid being an introvert
Regardless of how much “real-world experience” you come to the entrepreneurial table with, there is always something more you can learn. Your business will only grow to the extent that you do; be a leader who learns, researches, and assimilates new information in an attempt to make your entire organization more efficient and profitable. Take classes, network, ask questions, engage in conversations with other business builders. Above all, embrace an attitude of growth and expansion, and you will see the same happen in your business.

3. Take care of your employees
If you’re asking people to come and help build a vision and dream with you, you had better be prepared to take care of them! Build a culture that also supports employee growth and development while being mindful of work/life balance, and you’ll have people who choose to stay with you on your way to the top.

4. Act with integrity in all situations
Building relationships with employees, vendors, and customers takes time, but it is one of the most rewarding aspects of business that you’ll gain from starting out on your own. Act with integrity in all situations, from creating schedules and paying bills to satisfying customer orders and creating new products. Your reputation will precede you, and you’ll have clients and customers alike clamoring to do business with you for years to come.

There will be ups and downs, there will be periods of drought and periods of abundance. If you hold fast to your vision and passion and refuse to quit, as well as employ the strategies listed above, you will see consistent, lasting business success. Best of luck to you on your entrepreneurial journey!