Family is a beautiful and sometimes icky subject to approach when business is involved, as there are so many arguments for and against the involvement of family in forming any kind of business.
In my years of coaching a diverse variety of clients, I’ve found that a number of them run family-owned businesses and that there is a certain level of both ease and discomfort that come with making such an unpredictable choice.
As with everything in life, there’s always a lurking list of pros and cons that can be used to spark either healthy debate or ignite a scorching argument – so get your pitchforks and flamethrowers ready, as we take a look at some of them.
Is Blood Always Thicker Than Water?
In breaking down the different arguments for and against having a family-run business, I often run into both plenty of benefits and detriments in the situations that my clients often come to face.
These family-owned businesses come in different shapes and sizes: a husband and wife partnering up to conceive a healthy, young startup; a father and son building towards a timeless legacy; sometimes 3rd generation families that start with the grandfather and trickle all the way down to the grandchildren, exist, as well.
There is a lot of conversation around how to run the dynamics of a family business and a lot of business owners will often run into the decision whether or not to include or employ family.
Usually in those family-oriented businesses, there’s a tendency to employ family members that are either unemployed, miserable in their current jobs, or that they could trust in building a great business that will last. Most of the time it’s done out of love, but sometimes because employing family can work out as a nice, cheap option.
Some of the biggest advantages of having a family-run business would be more empathy all the way through the company, as there is an extra level of care; you often know who or what you’re dealing with in an employee and understand the person better; the opportunity of a faster start-up, because you avoid the process of sifting through people that you don’t know, avoiding tedious interviews and background checks; and family tends to be a bit more united from the get-go, having more motivation to succeed with and for one another.
Take a look at some of the most powerful family-run businesses like Nike, Walmart and Samsung – they are amazing at what they do and provide a pretty solid defence around family involvement.
Get your fire extinguisher ready – because on the contrary, Harvard research has proven that family-run businesses have a success rate of around only 30%. A scary statistic that should be paid more attention to, as 70% of these businesses fail, get bought out, or never make it past the 2nd generation.
It’s not difficult to find arguments against having a family-run business, as it’s not always a peachy and pleasant road to go down.
You’ll find that those high levels of comfort ultimately slow down the company growth, with a reduced sense of drive and professionalism; conflicts don’t necessarily stay business-related, but can carry through into personal affairs; often blatant levels of unfairness on staff that aren’t considered family, as promotions and progress in the company become a contentious issue; deciding which family members deserve leadership roles and raises certainly push buttons; and often a lack of accountability follows if management doesn’t want family who are in the wrong left feeling butthurt.
It can often change family dynamics quite quickly, creating resentment and rifts that were never there before.
Blood and Business Can Be Like Oil And Water
One of the saddest things that I come across in my experience coaching is the disjointing and disruption of families that can often be found in running a family business.
Quite often, married couples might partner-up in starting a business and pretty much all of their energy, time and efforts are spent on making that vision work in the best possible way. Waking up together, going to work together and all that is ever discussed is the business – creating an imbalance between their relationship and business-relationship.
As the proverb goes: “familiarity breeds contempt”.
All of that time spent on work and business, without enough focus on love, ends up eating away and destroying a marriage faster than a divorce lawyer with bills to pay. The power dynamics in family-business relationships often shift, too – the water gets murky and power becomes an issue between couples, parents, children and even grandchildren. It doesn’t always work out for the better when the kids take over the business, kick mommy and daddy to the curb and play with their budgets, while partying away the profits.
There’s a funny saying that’s echoed through time: “the grandfather started it, the father built it and the children spend all of the money.”
My stance is that if you don’t need to employ family or friends, simply don’t.
It’s not always worth the risk of burning bridges, creating rifts, starting fires and ruining the precious gem that is family. Love your family, take care of and respect them enough not to bring them into a potential and likely mess.
It’s impossible to go back in time and make your amends when the damage has already been done.
For more polarising and hard-hitting thoughts on your business decisions, tactics, ideas and plans:
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+2783 253 3339
