Family Run Business Meaning
Family run business refers to that business which is owned and controlled by the members of one family. In simple words in this kind of business ownership of the business or majority stake is with family members only. In order to understand more about this concept let’s look at the advantages and disadvantages of family run business –
Advantages of Family Run Business
Experience Sharing
The biggest advantage of running a family business is that one can pass the valuable experience to their children who join the business and hence train them while they are still around them which in turn make the future of company safe as leadership is transferred from old generation to new generation without any problem as family members are more likely to give all their knowledge to their own family which is not the case with other forms of business where not all knowledge is passed to the successor as he or she is the outsider.
Blend of Energy and Experience
This business is a blend of youth and old generation which results in on one hand family business getting advantage of energy and firepower of youth which is needed for taking the company higher and on the other had it gets the advantage of experience and calm of old generation which is needed for maintaining the old position of the company.
Commitment and Discipline
Another benefit of family-run business is that level of commitment is high as an individual is doing business for themselves and also due to family factor, there is a greater sense of accountability and responsibility towards the business. Another benefit is the discipline which comes naturally due to family members being present in the workplace and we all know how important discipline is to the success of any business.
Disadvantages of Family Run Business
Clash of Ego
The biggest disadvantage of this type of business is that the chances of the clash of ego are more as elders tend to impose their thought process while running business and youngsters feel frustrated as they are not allowed to show the talent because the decision making power rests with elders. Hence in simple words family business is run like a family and not a business which results in business not reaching its true potential.
Family Problems
Another con of family-run business is that if there is some problem in the family than that problem will not only affect the relationship of family members in the family but will also have an effect on the business as people find it difficult to segregate family with business. Hence in simple words problems in the family will lead to dual problem one in the family and another in the business.
Complacency
One of the limitations of family-run business is that chances of young generation being complacent are more as they do not have any fear of losing their job or position in the company which in turn will result in company suffering as complacent people never work hard enough and hence elders should ensure that youngsters are always alert and willing to work hard.
As one can see from the above that family run business is not a bed of roses and it has its own pros and cons and one should carefully analyze above points and then take the decision whether to join the family run business or not.