Family Business and its Team Leaders: Top Challenges

Family Business and its Team Leaders: Top Challenges

Every family business faces unique challenges and problems, just like every other business.

The keyword is CHALLENGE

Jason Hare Financial Business is a combination of passion and pride, as well as pain and glory. It’s a hardworking path to success. Some families find peace and prosperity with little effort, while others struggle to make it through each crisis.

Family Business success can be defined as the achievement of a happy family within a strong business. A family-owned business is more challenging because we try to achieve both desirable outcomes and within a set time frame. The happy family is twice as important as the strong business.

Evidently, Family Businesses go through different stages of growth and development. This makes it more difficult for the second or subsequent generations to enter the business.

Mexican family-owned businesses are famously described as “Father, founder, son, and grandson rich”. The founder builds the business. The son manages it poorly and makes it grow. However, the grandfather inherits the business and a bank account empty.

A family business is a hardworking path to success

Below are some of the most important challenges that family-owned businesses face. These will determine the success, growth and continued operation of a FAMILY business.

1. Emotions – Business problems can affect family members. Family problems such as divorce, separation, financial or health problems can also lead to difficult political situations.

2. INFORMALITY – Absence of clear policies or business norms for family members.

3. RESTRICTED VISION: Lack of outside opinions and diversity in how the business should be run.

4. CARELESS DOCUMENTATION: No plan or long-term planning.

5. FAMILY MEMBERS COMPENSATION- The compensation of non-participating family member members is not clear and justifiable.

6. CONFUSED ROLES – It is important to clearly define roles and responsibilities.

7. FEMALE MEMBER OF THE FAMILY QUALIFIED – Family members with low skills or no qualifications should not be hired. Incompetence should not be tolerated.

8. AFFORDING MORE COMPENSATION TO FAMILY MEMBERS – This is a common myth. Family members are often given more compensation in a family company and have a tendency to be incompetent towards management.

9. PLANNING FOR SUCCESSION: Great divisions and conflicts are caused by a lack of a plan to transfer the power to the next generation.

10. ESTATE PLANNING and RETIREMENT – Long-term planning to meet the needs of the older employees when they retire from the company.

11. PROBLEMS IN COMMUNICATION: Differences in seniority, emotions like fear, envy, and anger can cause zero communication between members.

12. DISABILITY TO CONTROL – Difficulty controlling the operation of the organization and other family members, as well as a lack of supervision in the day-to-day activities can lead to even more problems.

We all know that families and businesses come from different places. They cannot be combined, just like oil and water. Families have built businesses together for generations, and will continue to do so.

Working in teams is one of the biggest challenges in family businesses. While teamwork can bring great rewards, there are also many frustrations. Collaboration within groups requires improvement in creativity. This creative power must be encouraged, harnessed, and channelized by the team leader.

Andrew Carnegie – “Teamwork is when people work together towards a common goal.” Ability to guide individual achievements towards organizational goals. It’s the fuel that allows ordinary people to achieve uncommon results.

To ignite the creativity within the team, it is crucial that the leader of the team unleashes the potential of the members.