If you are involved in a family business, you know better than anyone about the intense mixture of pride, responsibility and family honour that goes into a simple day at the office. Of course, independent entrepreneurs also face stresses and challenges, but there is something uniquely high pressure about running a company in which your entire family (and in some cases, your heritage and ancestral history) are invested.
Studies have shown that family run businesses tend to outperform others over the long run – this can truly be a brilliant way to operate an enterprise of any size.
While an average business person has to worry about keeping their own career on track and giving their employees the best opportunities possible, a family business owner must do all of this – and keep the family’s livelihood and good name afloat. It isn’t easy – but of course, it comes with great rewards.
Business people who are involved in family owned and operated enterprises will usually have the advantage of a built in support system and a team of people who are intrinsically connected to and concerned with the success of the business in a way that average employees are not.
As you can see, the issue is far from cut and dry. If you are considering entering into your own family business, read ahead to assess a list of pros and cons that may help you to decide just how involved you would like to get with your own kith and kin.
Should you Enter into a Family Business? – Pros and Cons
- Loyalty – As mentioned above, your family (providing that they are a supportive and generally well balanced lot) will often be loyal to you in a way that hired employees can never hope to match. You will usually not have to worry about them taking meetings with competitors behind your back, spilling trade secrets to their friends and handing in two weeks notice at the busiest time of year.
- They are invested in the business and will work hard – As their own name and profits are invested in your brand and business, everyone involved in a family business is likely to give their all every single day. It can be difficult to get motivated to help a faceless corporation succeed; your family members will not have this problem, as everything they do contributes directly to their own pocketbooks and bank accounts.
- They’ll be honest (brutally so) when needed – If you own a small to medium sized enterprise and are surrounded by hired employees, management and assistants, you may not be getting the most honest opinions when you ask for them. No matter how much your team respects you, they are still your subordinates and there is an innate power dynamic built into the relationship that might prevent them from telling you how they really feel about your ideas. Your brother/sister/cousin/niece/father is far less likely to smile and nod when you suggest an idea that they regard poorly. Their critique and honest feedback can be the difference between launching an unsuccessful initiative and putting some more research and time into the strategy.
- Family is more likely to be flexible – Do you need to occasionally bring your little one or even your pup to the workplace? Need a last minute day off in order to take your child to the doctor? Feeling poorly and want an extra day at home to nurse yourself back to health? Chances are, your family members are more likely to be flexible and understanding when it comes to personal matters and childcare emergencies.
- You will save money on recruitment and limit turnover – As your family grows over the generations, you have a built-in talent pool! That’s right, recruitment can become very simple when you are selecting most candidates from within your family tree. Your nieces, nephews and children are also less likely to leave you in the lurch, which means that your turnover will be a lot lower than your competitors. In addition, many of the children in your family will grow up enmeshed in your industry, meaning that they will understand your business in a deep way that others can never parallel, and they will need far less training.
While your family members have financial and pride investments in this business, they may also feel comfortable enough to let some of their more negative traits shine through. This can lead to complacency (“I can’t lose this job – it belongs to me and my family!”) and a sense that they don’t have to work hard every day. Worst case scenario is that other hired employees see this behaviour and begin to mimic the bad example.
- Family baggage can cause conflict – Let’s face it – we all have conflict in our families. Whether someone is still holding a grudge from 1989, or the baby of the family always feels judged – there are countless points for potential clashes. The key to avoiding this is getting it all out in the open and agreeing to leave personal grievances at the door – this is business, and getting into petty skirmishes (no matter how emotional and urgent they feel) will hinder your bottom line.
- You can get stuck in a rut – By keeping most senior positions within your family, you risk getting stuck in a creative rut, as most of the people you will be working with have a similar background and point of view. Ensure that you mix things up and hire consultants and management from outside your inner circle.
Whether you choose to strike out on your own, start a new family business with your brothers, sisters and cousins or commit and join a long established familial firm, the differences between family run businesses and independent entrepreneurship are many. It is up to you to weigh the pros and cons and choose the option that works best for you.