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A family business is a popular engagement today. The companies with billions’ assets like Ikea, Zara, BMW, Hallmark, or Casio are examples of successful family businesses. On the whole, family businesses make more than 80% of the world’s free economies. A family-controlled company seems a sound way to invest money. It is not a careless venture for one already knows the people he or she will be working with. However, a family business may be a risky undertaking with an unpredictable outcome.
A family business is different from the others due to the presence of the family. As a rule, it is preferable to keep the business in the family without attracting outside investments. At some stage of its development, a family-controlled company faces the problem of succession. At this point, the success of the business depends on the ability of family members of different generations to communicate and find a compromise. A proper development plan is necessary to provide succession. Besides, a family-owned firm influences the relations in the family. The difference between the family and the company roles may be blurred.
It is necessary to educate and inform the shareholders of the company’s work. Shareholder meetings give an excellent opportunity to discuss the current problems and the perspectives of development. It is also important to distinguish between family issues and business. The mixture of the concepts may lead to the loss of family values and cause conflicts. It is advisable to have a certain place for work and not turn a family home into a factory. Since it is a family business, a Family Council is needed to manage the company. The sound idea is to employ some non-family members. It is useful to have unbiased employees.
In a family business, the employment of younger members is usually a birthright. On the one hand, it is a positive tendency. If siblings know they will work for a family company, their education choice is conscious, and they learn the peculiarities of the company since childhood. On the other hand, prospect successors maybe not interested in the field of the company. In this case, it is better not to insist on their participation. A non-involved person will not provide product management. Thus, the problem of succession is among the burning ones. A proper successor should know the business well, should be aware of personal strengths and weaknesses and able to evaluate the suitability for the suggested position, and have a good relationship with other generations in the family.
Even with the presence of a worthy successor, the transfer of power may be a painful process. The current leader may not want to leave the position, or there may be no suitable successor. The transfer of power is unique for every family company and should consider its peculiarities. If there is aboard, the successor should be approved at the meeting.
A particular role in a family business belongs to the CEO spouse. This person may select various roles. For example, he or she may be just in a relationship or be an equal partner or a chief trust officer. The choice of the role preconditions the participation in the life of the company.
On the whole, starting a family business needs many considerations. A person should have some capital, the necessary knowledge in the field, and the support of the family. A challenging venture may become a success if a family works as one body.
Works Cited
Danhof, Clarence. Change in Agriculture: The Northern United States. Harvard University Press, 2012.
Demaree, Albert Lowther. The American Agricultural Press, 1819-1860. Columbia University Press, 2014.
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