Some people think that the best way to run a business is within the family. What are the advantages and disadvantages.
It is true that family-run businesses have never stopped gaining in popularity over the world.
Although
this
model is applauded by many experts, it still exists some limitations.
On the one hand, there are a number of advantages of family-run businesses. First
, since the company
is operated and overseen by family members, such
as children and wife, or relatives, it is difficult for outside parties to steal the control of the business
. This
means that the family has an absolute control and power over strategic decisions, staffing or a payroll, which is of great benefits for all family members. Second
, since family-run businesses are private corporations, they are not subject to complex financial complicating reporting requirements. As a result
, the company
can save a great deal of money on hiring a team of professional accountants to prepare external reports and deal with government stakeholders.
On the other hand
, family-run businesses are not without disadvantages. In fact, conflicts related to business
among family members have the potential to sabotage any family relationships. For instance
, the dispute over either business
owner or salaries might lead to a quarrel or even an avoidable family estrangement. In addition
, non-family employees working for family-run business
might see the way of running the company
is not fair to them. For example
, even if they perform exceptionally well and make enormous contributions to the company
, chances are they will not be recognized enough compared to those who are family members.
In conclusion, given clear advantages that family-run business
have, there are still some limitations. By acknowledging the limitations, the business
owners can find the ways to dodge them.Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Writing9 with appropriate and specific direction to the original content.
