Sharing a business with the family may seem easy, however, managing it is not without its difficulties. In Mexico, more than 70% of this type of business disappears without having reached 25 years of existence, because it does not give importance to the formation and training of the next leaders.
However, the characteristics of a family business provide several benefits, so this time we will talk about them, as well as their main problems and what are some of the keys to overcome them.
What are the advantages of a family business?
Its stability allows it to consolidate its own work culture
One of the main characteristics of a family business is that there is greater longevity in leadership, with retirement being the main reason for leaving a managerial position. This situation allows the development of one’s own work identity and continuity to a business strategy, which usually helps in times of crisis.
A higher level of commitment
Since the business represents the family’s livelihood, there is usually a greater commitment. However, its members must have adequate preparation about the industry and how the management of the family business works so that it does not fail. Only about 23% of family businesses have a succession plan, so it is necessary to train them early.
Another advantage of a family business is that members are willing to assume various roles to ensure the operation of the business and lower costs. This point is particularly crucial in times of economic recession since they will be willing to reduce their salary and even contribute capital.
Family businesses tend to see more of the future. Its members are more patient and have a greater long-term perspective, therefore, there is the possibility of making less hasty decisions and developing better strategies that span several years.
What are some difficulties in the family business and how to deal with them?
Each family generation has to reinvent itself
Learning how to run a family business that lasts for generations is challenging, especially when business life cycles start to get shorter. Now it is likely that, when the new generations join the company, the business model is already in decline, so they must develop a greater entrepreneurial culture to reinvent the company and boost its growth.
These types of companies tend to suffer from family conflicts, which tend to belong and, therefore, complicate the operation of the organization. The important thing, in this case, is mediation, surrounding oneself with counselors outside the family so that they provide a more neutral vision, as well as creating protocols, agreements, or family assemblies where these types of situations are attended, and the boards of directors are only left to strategies and monitoring of business objectives.
Another common problem is involving a large number of members in the management of the family business. Although support is always sought, it is important to choose only those people who add value to the business. In addition, this will help to avoid conflicts of interest. The more professional the selection of managerial, executive, or executive positions, the more growth opportunities there will be.
Now that you know how to run a successful family business, you just need to carry out an adequate succession plan and create innovative strategies that help boost its development generation after generation.