Family businesses – like other non-family businesses – face challenges in their everyday operations. Growth, cashflow, compliance and risk (to name a few), can put businesses under pressure.
Family businesses often face their own unique challenges that not only put the enterprise under pressure, but also the family. Whether it is succession of ownership or management, the working dynamics of different generations, separating business from pleasure, or deciding on the correct and fair pay rates, there will always be pressure on the family and the business.
While we talk about family businesses as being unique and different to other companies, there are opportunities to implement strategies within the family and business that can alleviate some of the challenges creating pressure. This pressure can result in poor business performance, disengaged employees, lack of or no communication between family members, and even lifelong disagreements between siblings.
Documented responsibilities and roles within the business
Establishing clear roles and responsibilities for all family members helps avoid confusion and ensures everyone knows exactly what is expected of them. Lack of clarity for family members around job descriptions, levels of authority and hours of work have a negative impact on the business, other employees and the family itself.
Clear and open communication at work and at home
According to our Family Business Survey, Family member communication style was identified as one of the main factors for the greatest source of conflict in family business between the different generations. In a melting pot of emotions, family dynamics and personal relationships, how families communicate can have a big impact on the business and the family. Establishing Family Boards, an Advisory Board, separate family meetings or a documented Family Constitution, can all help improve communication for families and businesses. Addressing concerns and issues early – with a structured approach – can avoid them becoming bigger issues.
Engage with other family businesses, advisors, and industry groups
While every family business has unique issues to navigate through, there are advisors and industry groups that work with family businesses, and they have experience in dealing with the pressure points in families as well as their businesses. Seeking out external support can be the catalyst for family businesses to overcome some of these pressure points. Industry groups such as Family Business Australia provide a unique way for families to interact and learn from each other.
Working with clients
At Grant Thornton, we work with family businesses in many different industries. Whether through direct one-on-one engagement with family businesses or through simple steps to see family businesses overcome issues and hopefully not put the family and business under pressure.
Contact your local advisor today and find out more about how you can positively deal with pressure in your family business.
