Many small businesses are staffed almost exclusively by family members. In theory, family-owned businesses are ideal because family members can form a loyal foundation for the company and because family members will often have a greater dedication to achieving the company’s their common goals. Family owned businesses often have a built-in support system that should ensure teamwork and solidarity. Other benefits of a family business include long-term stability, trust and shared values.
Where it works, it can work well. But having family members of the business owner can also bring problems. Relationships can break down leading to in-fighting. Sometimes family members are brought in (typically the adult children of the business owner) and problems can arise because they’re not automatically a chip off the old block and not necessarily the right person to assume the mantle of MD.
A degree of caution is needed. Only bring in family members if you’re satisfied they can do the job, even if they’re on the good raw material stage. So recruit as rigorously as you would if the applicant was a stranger. I’ve seen so many good businesses go downhill once the original owner retires because the children either can’t run it or treat it like a piggy bank, without taking the necessary steps to ensure it runs effectively. To keep things going properly you have to install a system of checks and balances to ensure otherwise you may be a victim of the old saying “shirtsleeves to shirtsleeves in three generations.”
Locally there was a brilliant little shop - a cross between a builders merchant and DIY store. It was run by the inimitable Sid Telfer for many years. Everyone who worked there was helpful and knowledgeable and you could buy items in small units. As the years went on, Sid wanted to retire and Sid’s son started to take on more of the day-to-day control. He had worked in the business for years and knew a lot about it, but he hadn’t learned how to run a business and it started to fail. Sid stepped in, built it up again and sold it on and through it is early says, the shop is still there. I hope it is successful and its ethos remains. I’d choose it over B&Q any day of the week.
Succession is one of the most difficult challenges that family businesses face. It can be a question of who to bring on. It’s natural that parents want to hand a flourishing business to their children, but sometimes the children aren’t interested in coming in to the business. And if they do, often the older generation does not allow the younger generation the room needed to learn, develop and grow.
If you need help sorting out HR problems in your family business get in touch!
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