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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

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.

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