The Challenges of Running a Family Business Worth Discussing Today

The Challenges of Running a Family Business Worth Discussing Today

Growing up in a family business is quite a privilege, especially when you think about the economic challenges of putting up a 9-5 job. But running it isn’t easier either. Family businesses indeed have a hell of a lot of amazing benefits, but in this post, we are going to talk about the challenges that intrigue us more. This is because, when you are prepared for the worst of what might happen to you, you are ready to take the plunge without fearing the consequences.

So, there are several challenges doing business with your family members, whether it’s your siblings, parents, or even your kids. Here we will discuss some common ones so that you can make preparations accordingly. We will create hypothetical situations while explaining every potential challenge so that you understand better. It will help reduce the anxiety regarding any issues while running a business with your family members.

Let’s dive right in then!

Conflicting views

This is the first major challenge that comes to our mind while talking about a family business. No two people in the world can have the same views regarding a situation, even if they belong to the same family. For example, if you run a business with your brother, and there is a situation that you have to handle, both of you may have conflicting views regarding the potential solutions. As there is less formality between siblings while talking about something, many times you may feel pressured to surrender to your sibling out of genuine love and respect. Don’t! You should be on the same page despite differences in views while taking business decisions.

The best way to handle this is to open a channel of seamless communication with each other, where you will be free to share your views, no matter the difference. Share and discuss reaching a middle ground, which will be best for the situation at hand. You may bicker like little kids, and it’s completely normal. Just don’t digest anything if you don’t agree with it in the first place. Ultimately, any decision taken should be the best one for your business.

Differences in priorities

Now, the next thing that affects most people running a family business is different and changing priorities. And the way they handle it. Say you are free to take a lot of responsibilities today, but tomorrow, if there is a major event in your life, say marriage or the birth of kids, your priorities are likely to change. You may give as much time to the business as you did before. In that case again, the best way to avoid conflicts is by talking with your respective partner(s) and create a definite schedule. Chalk out timings when you can take responsibilities together and when individually. Also, discuss which sectors you are going to handle and how.

Then again, if you are running a business with your parents, you have to consider certain things, like adequate breaks, medical conditions (if any), and of course, the time for retirement. Let’s say you run a business with your wife, who is about to give birth and wants to take a complete leave for a few months. Both of you should plan for at least one financial year in advance – how you will run the business, take decisions in her absence, whether you will hire some temporary workers, who to give the responsibilities, etc. The primary aim is to combine your energies and vibrate together, thus moving in the right direction, no matter the different events or priorities in your lives.

Generation gaps

It is equivalent to the differences in priorities, as discussed earlier. While your parents, who are nearing their retirement age, may not be as eager to take certain risks, you, on the other hand, may look at the brighter side of things. You may know exactly what to do to mitigate the risks and move ahead. It is then that you have to convince your parents about your ideas and how you are planning to deal with adverse situations.

Some people face huge issues while executing such plans, especially if other members of the family (and business) oppose them. The rule of thumb is not to lose patience. Hear them out, see what they have to say about the potential risks, and learn why they are being skeptical about it. You can then explain your plans to them and try to convince them about the same. If you keep them in the loop, maybe they will lose their fears and start supporting you later.

Another issue that is caused by the generation gap is the use of technology. We have to admit that previous generations are not that techie as we are. They may even prefer to use conventional methods, while we root for technology. In such cases, we have to be quite patient and deal with the matter positively. As technological advancement and upgrade is a key part of business growth, one should be ready to sail with the wind. If parents, older siblings, or other partners having conventional approaches, don’t feel comfortable with certain technologies, try to make it simpler for them to understand the basics. If you oppose them directly, it won’t be healthy. Ask them to stay updated, at least theoretically, so that they get the processes better.

With proper, one-on-one discussions, you can solve any issue related to generation and knowledge gaps.

Seamless and effective communication

As you can see, effective communication is the key to resolving issues and overcoming challenges in a family business. But it is easier said than done, especially when you are working with your family members. Differences in ideologies, views, priorities, perceptions, risk management, and everything else comes to play. Then again, the discussions go way beyond offices and reach the dinner table, and that’s when most problems arise.

Further, what you can say to your partner in the business may differ from your approach as a family member.

In business, we tend to call each other by our first names, but how comfortably can you do that when you belong to the same family? Like, can you address your father by his first name? And even if you have qualms about it, how are your parents going to take it? Will THEY be comfortable? Hence, you have to learn to keep the two things separate as much as you can. There are different layers of communication and approaches that should be considered while running a family business.

Professional-personal balance

While discussing work at home, one should ensure that everyone is comfortable with it. For example, your kids may not like it, your spouse may think that you discuss work too often and don’t give enough time to the family, and the list of complaints goes on.

Striking a balance between work and personal life is necessary. For a family who runs a business together, the urge to discuss work at home is quite natural, as you have all the important members present. There is no point in delaying certain decisions, right? No! Try not to give in to the habit as it may create problems at home. However, emergencies are always exceptional and can be entertained, if not frequently. You can explain the situation to the rest of the family and take permission before holding a round table conference at home.

One thing that you should keep in mind is, you are not your business, and your relationship with your family members, when you are at home, is not professional. We won’t even suggest addressing your family as a ‘business family’ as most people do. These two things are separate, so keep them that way. When you use the term, you are blurring the lines further, even if subconsciously. Always remember that once you enter the home, you are no more a CEO, a partner, or a shareholder. You are just a brother/sister, a parent, or a son/daughter. There is a thin line, so blurry that most people tend to ignore it. But if you are aware and keep this in mind, everything else will fall in place.

Balancing commitments and accountability

You need to understand this part with the help of an example. Suppose, you are on a vacation with your family, who are also partners in the business. You have to share responsibilities to keep the business running. Company representatives should be able to reach you regarding queries or business decisions that cannot wait for your return. Talk to your family about these things before leaving. By sharing responsibilities, we mean that you should take some time out every day, to handle business affairs.

For example, if there’s a video conference and you are busy spending time with your kids, ask someone else to cover for you. Then again, if there’s an emergency and you are unavailable, let someone else make the necessary decisions after discussing the same with you over the phone. Make sure you return the favor in due time. Sharing such commitments will not only help you enjoy your vacation but also ensure that the business faces no glitches. However, you have to realize the difference between an emergency and something important but not urgent. The latter can be postponed to a suitable time. If you spend your vacation working, it will be exhausting and displeasing to your family at the same time.

How to overcome these challenges efficiently

All the challenges that we have talked about in the aforementioned points can make running a family business increasingly difficult for the members. Discussions may turn into debates, and decisions may be forced. Even if you are patient enough to explain everything to each member involved, certain emergencies need immediate attention, and this is exactly where everything may crash.

The best way to overcome the challenges is to seek advice and assistance from a mentor, or an advisor with more knowledge and experience in bridging gaps and reducing the difficulties in communication between the partners. A third person will be in a better state to understand both parties, analyze their perceptions and help them achieve common ground while executing plans and making important business decisions. Everyone will agree that any conflict can be resolved with the involvement of an unbiased ‘someone', who can see things from outside the circle and gain a better understanding of the situation.

If you have someone like that in your family, well, it is a bonus. But again, a family member, who plays the part of the mentor, will face the same issues in business. Hence, it is always better to do this one thing professionally and hire an advisor, someone with both the knowledge and expertise to help you overcome the challenges of running a family business.

We hope that you found this article helpful. If you have queries, do not hesitate to reach us!

Purdeep & Harjeet Sangha
Business Brothers

P.S. Join our family business newsletter at theFBOss.com! You’ll get tons on insight on how to grow your business, elevate your wealth and successfully deal with family dynamics.

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