Issues in Family Businesses
Family businesses are like any other business in their need for good financial, legal, marketing, HR, IT support etc but have they have the additional dynamics of the family to take on board. Many smaller SME businesses are family businesses of one sort or another.
A family business has traditionally come in all sorts of permutations such as a husband and wife team, or father and sons, or two brothers, or someone funded by his father-in-law. It is now very common for daughters, mothers and sisters to be included in the permutations which brings a much valued and better gender balance. Shareholders and key decision-makers may be family members but not necessarily be involved in day to day management. They may wield considerable power but not always as constructively as the business needs. In contrast it is not unusual in family businesses for there to be a power vacuum where nobody makes key decisions.
Two sets of dynamics are often at play. One set is the dynamics between the family members and the other is the set of dynamics between the family and non-family members of the business. With family dynamics, power dynamics and assumptions are inevitably not far behind – almost irrespective of what the job descriptions might say.
Family businesses often struggle with issues such as changing direction to meet changing markets or succession planning or conflict management to name but a few.
‘Stakeholder alignment’ is a phase often mentioned in terms of large businesses but it is no less crucial in small businesses. It simply means that everyone’s interests, both family and non-family, need to be served by what the business does and how it does it.
At SME Strategies we have considerable experience of family businesses and their dynamics. The role of the trusted business adviser can often be of exceptional value in family businesses bringing independent thinking, a structured approach and a genuine care for the wellbeing of all involved in the business.
Read our blog on ‘How to avoid the pitfalls in a family business’.
“David is a very available person. He performed an invaluable facilitating role to us as a husband and wife team. He was prepared to challenge us but did so nicely. He has given us practical tools to help run and grow our business.” – Roy Pearce, Pearce’s Pins.
“David has given us confidence. He believed in Roy and me from the outset. He pushed us beyond our comfort zone. He gave us sales advice and encouraged us to use our network and develop our connections. As a result we have increased our turnover and strengthened our order book. David has educated us!” – Hilary Pearce, Pearce’s Pins.