The challenges you have to deal with in a family business are unique and different from the ones people usually face in other businesses.
There are some very common threats to family businesses, which you must be able to identify and address as quickly as possible because a delay in this direction can bring disastrous results. Following is a brief rundown on the three most common pitfalls for family businesses and how to deal with the same.
3 Common Pitfalls For Family Businesses
Allowing Emotions To Interfere With Your Business
The biggest problem that you may come across in running a family business is to keep your emotions away from your business. Since your close family members are playing their specific roles in this business, the chances of you getting emotional in certain cases are very high.
When business decisions are based on emotions rather than strategic calculations, it can affect the success of your business drastically. Emotional people cannot make sound business decisions. The only way to deal with this problem is to keep your emotions separate from your business.
Always remember, when it is business, it is never personal. However, it does not mean that you should turn completely insensitive to your family members. If you do, it can cause internal conflicts. So, keep a right balance.
The Chances Of Nepotism
Nepotism is another big threat to family businesses. When you run a family business, you might be tempted to hire employees from your relatives on the basis of your family relationship with them rather than their actual qualifications and skills.
This can be disastrous for your business in various ways. First, non-family employees will feel bad about it and they will lose the motivation to give their best. Nepotism can also cause some of your best employees to leave you and join your competitors.
On the other hand, the employees you hire on the basis of family relationship are also very much likely to become insincere and lazy because they know you are not going to penalize them or fire them just because of non-performance. So, do not encourage such practices.
Hire your employees only on the basis of their merits and experiences, not just on the basis of a family relationship with them. If you are hiring employees from your relatives, treat them like you treat other employees; do not give them special privileges as long as it is regarding your business. Treat all your employees equally.
The Chances Of Family Feuding
Keeping your emotions away from your business and discouraging nepotism can also have a serious negative consequence, as it may increase the chances of family feuding. Some of your family members may get displeased with you if you do not hire them or the persons recommended by them.
For example, your spouse can become angry if you do not hire your brother-in-law, saying he is not qualified for the job. Such things can cause serious internal conflicts that are often a result of personal egos and rivalries.
Therefore, it is very important for you to promote the concept of keeping the business and personal lives separate because it is in the best interest of all the family members. You must be able to identify a family feud at a very early stage and must address the same immediately with diplomacy.
Overall, if you want to run your family business successfully, you must always have a proper plan to identify the above threats and address them quickly in a non-emotional (not insensitive though) manner.