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On the Advantages and Disadvantages of being part of a Family Business
Being a member of a family business can be a double-edged sword.
Personal views
“ There’s nothing like being your own boss.”
“ I don’t think that I could have achieved as much as I have if I hadn’t been part of a family firm.”
“ It’s a personal privilege to be part of a family business.”
“ It’s been the cornerstone of my life.”
“ Working for a family business is the best – it gives you a choice.”
“ It can be difficult to strike the right balance between the family and the business.”
“ A lot of family shareholders have all their eggs in one basket.”
“ I have four brothers and I couldn’t work one day with them.”
“ A family business can be a means of preserving family unity.”
Points made
Advantages to the individual
- Puts you in control of your own destiny
- An acute sense of achievement as a family
- An incentive to keep going
- Provides a certain level of freedom
- An opportunity of employment
- Can keep the family together
- Creates wealth
- Offers security
- Instills a sense of pride and belonging.
Advantages to the business
- Can be a competitive advantage
- More strategic than tactical
- Creates enthusiasm and passion
- Can enable a company to outperform
- Offers a strong corporate culture
- High staff loyalty, lower staff turnover
- Builds a family’s status in the community
- Long-term corporate vision.
Disadvantages to the individual
- You can feel trapped. Might prevent you doing what you really want
- Need to be better than non-family peers
- The weight of family, peer and employee responsibility
- Can be difficult to raise liquidity
- Can tear the family apart, if not properly managed.
Disadvantages to the business
- Family businesses can be regarded as amateurish
- Non-family members may not join because they cannot reach the top
- It can be difficult to raise capital
- Senior family members may see themselves as having a job for life
- Decisions may be too emotional
- There may be a deep seated aversion to change
- It can be a struggle to continue the spirit of entrepreneurial flair.
