Typical family business problems

Because of their different ways of functioning, family businesses face specific problems. Many co-owners of family businesses have found it extremely difficult to solve these problems by themselves, perhaps because they block the personal feelings resulting from family ties.

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1. Conflict solving

Disputes are a common part of business relations. They are not a problem in themselves if they are resolved in the right way. However, in family businesses, solving them often takes a long time and unfortunately becomes a field of legal disputes, which often prevents a quick and advantageous agreement between the interested parties.

Disagreements must be addressed in a way that respects all stakeholders and does not interfere with their mutual relationships.

2. Long-term stability

A family business can only be successful in the long term if it has precisely defined goals and management and has a clear division of responsibilities and does not mix the roles.

In addition, it is necessary to set fair remuneration for statutory bodies and company management and clearly determine the dividend policy among the co-owners.

3. Company management

All family members involved in company management must know the limits of their powers and respect them.

Statutory bodies and company management should not contain family members who are only involved formally and do no work.

4. Communication

Good communication between management members is the ultimate foundation for the company to work successfully. In a family business, co-owners must be careful not to mix work and personal issues.

Both the original and the new generation must agree on the form of communication, since their ideas about it might be different.

5. Generational succession

In every family business, you need to recognise the right time to pass on the proverbial helm to the new generation. For such succession to go smoothly, it is necessary to clearly define the goals and values of the business to be followed by the next generation.

Successors in the company management have the right to freedom of decision, yet they must take full responsibility for their decisions.

6. Self-fulfilment and professional satisfaction

For the company’s founder, it may be difficult to accept the fact that the new generation will gradually take over the management of the company. But if the successors are to feel professional satisfaction, they need to know they really have management competencies.

However, the prerequisite is that they themselves have a personal interest in the family business and its further prosperity. Therefore, they have to decide on what career path they want to choose.

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