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.

Further Information

If you are the owner of a family business with a turnover greater than £1 million per annum you may wish to attend the Coutts Forum for Family Business Owners. To find out more about attending, please contact family.business@coutts.com

Coutts Cranfield Executive Education Programme for Family Business Owners

Find out more