Family Business: Successful or Explosive? | Samuel Rosenberg

Family_business_crossword_imageBRIDGETOWN, Barbados, Thursday October 22, 2015 – Many of the businesses that you transact with are small businesses that have been operated by the same family for years, often several decades. The person you deal with may be the son or daughter of the owner, who took over the business from their mother or father, many years ago.

When you consider opening your own business, should you choose to work with members of your own family, or is it better look past those close to you and hire other people without that family connection in order to make your business more successful?

Whether you employ or are employed by family members, a decision about working with family needs careful consideration; you need to look at the benefits and downside of working with people that you think you know so well. Successful people will take the time to list the positives and negatives and really contemplate the best option, because any problem that exists within the business may be blown up out of proportion and become a significant family problem overnight.

Looking first at the positives, you can almost always expect trust to be at its highest in your relationship with close family members because you will have a shared history and know each other well. As much you trust an employee who you hire through interviews, etc., you will never know enough about their background to be able to trust them 100 per cent.

There are always exceptions to every rule, as there may be with the trust issue and occasionally with commitment, but surely family members will have a bigger obligation to the business – because you can all see, feel and touch the results of your devotion in terms of how you feed your families, what special treats you are able to provide for your children – and will be committed to work with you 24/7. If there is chaos or crisis in the business, it is your family that will set everything aside to help you.

Because of your shared history, it is easier to communicate all of your thoughts and decisions with family members, compared to other people. Those same close relatives will have a good idea of your strengths and weaknesses as you will of theirs.

The biggest problem with working in a family business is that when you disagree on an approach or decision, you can take those problems home with you.

There will also be a full range of family pressures put on you and other members of the business. Where you make a decision that is good for the business, but not so attractive for your family, they may try to talk you into making the decision that best suits them. You may also find it very difficult to fire close relatives without isolating a complete section or side of your family because of your actions, whether they agree with you or not.

The good news is that working in a family business provides you with a long-term tradition and understanding with your customers, but you will need to draw a line between family and business roles, be prepared to discuss everything in detail, and have written plans to avoid any problems that may arise in the future.

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samuel-rosenbergSamuel Rosenberg is the founder and CEO of Axcel Finance Ltd., the leading regional microfinance institution. Share your thoughts and email your questions to srosenberg@axcelfinance.com