Family-run businesses

If you start or join a family business, you'll likely gain some advantages that you often won't find in other companies. On the other hand, you may face issues with family-run businesses.

Advantages of family businesses

• Common values — family members often share the same beliefs and long-term goals, creating a unified approach to business operations. This alignment can foster a strong company culture and a clear sense of purpose.
• Strong commitment - family members are typically more invested in the success of the business. This can lead to greater dedication, longer working hours, and a willingness to go the extra mile.
• Loyalty and trust - strong personal bonds mean you and family members are likely to stick together in hard times which can contribute to the long-term success of the business.
• Long-term planning - Family businesses often focus on sustainability and legacy, encouraging strategic decisions that benefit future generations.
• Cost savings - family members may be more willing to make financial sacrifices for the sake of the business. For example, they might accept lower pay to help the business long-term or they might defer wages during a cash flow crisis. You may also find you don't need employers' liability insurance if you only employ close family members.

Disadvantages of family businesses

• Lack of skills or experience - some family businesses will appoint family members into roles that they do not have the skills or training for. This can have a negative effect on the success of the business and lead to a stressful working environment.
• Family conflict - personal disagreements can spill into the workplace, affecting morale and productivity. Unresolved disputes may destabilise the business.
• Favouritism - can you be objective when promoting staff and only promote the best person for the job whether they are a relative or not? It is important to make business decisions for business reasons, rather than personal ones. This can sometimes be difficult if family members are involved.
• Succession planning - many family business owners may find it difficult to decide who will be in charge of the business if they were to step down. The leader should determine objectively who can best take the business forward and aim to reduce the potential for future conflict. This can be a daunting decision.

For further information see employing family members.