Hi, everybody, we get this question a lot these days in COVID-19 times, when some companies are doing very well despite the Covid-19 PANDEMIC AND SOME COMPANIES ARE IN BIG TROUBLE.
So what we know from research is that the first generation start it, the second generations grows it and refines it and the third generations squanders it.
So this is of course not 100% true with all companies, but the general rule is that the second generations should sell the family company and the third generations should do something else with their lives.
The stress level that comes with taking over a family owned business in the third generations is very hard to cope with.
There is also one very important aspect that families do not talk about and that is that the sibling rivalry that can happen when you run a family business it can destroy the family bonds for ever.
So siblings can have these horrible falling outs over a family run business.
And it is very important that the generation that is handing down the family business structures everything properly legally to avoid these sibling rivalries.
So when you work in a family business it comes with a lot of pressure and it is usually very bad for the family relations.
If the business does well then it is , who makes more money, and if it goes bad it is who does not pull their weight enough in the company and the blame game goes around, and never really stops.
So there is something to be said about selling the family business just is the right moment to keep the peace in a family.
We know that families who do not work together gets along much better with each other , than families who also works together.
There is people who will disagree with this article, but quite frankly as a business consulting company who mainly deals with family run businesses and companies that have several family members involved in them , we can say with certainty based up on our experience that this statement is very true.
It is not so much that siblings and family members wants to butt heads with each other, but business environment is very stressful and normally you work with people that are your colleagues, but then you go home for the day, with family your lives are so entangled with each other, so you never really get that stress free zone.
So even if it is difficult to let go of a family owned business sometimes it is the best thing you can do , is to sell it outright and then share the proceeds and let everybody go their own way.
Let us give you a typical example of a fight that takes place in a family owned business, so let us say that the sales manger/marketing manager wants to spend 25.000 dollars on an ad for the business, and the CEO does not approve of that spending, and they are brothers and they have a huge fight over this one thing on a Friday.
Then there is a family birthday the next day and they need to see each other on this Saturday and play nice.
Compared to if they only would work together and not be related, so then they would see each other on Monday where cooler heads can prevail.
So working in a family business is a really tall ask for anybody and it is something that you should normally avoid if you can.
If you are an owner of a family business and there are constant fights within the business , maybe let som people go or just sell the business outright and keep the peace in the family.
Because family matter and it is very important, and never ever let money come between you and your family.