A company's growth is often determined by the value added by its stakeholders. Many owners in the
trade
community strongly agree that the contribution of family members is the most effective element in running a
business
successfully. While
this
viewpoint has various positive aspects to it, there are a number of disadvantages as well.
To cite one of the cogent advantages is that organisations with
trade
secrets are not prone to outside threats, if the key knowledge remains within the family members. Not only does
this
help safeguard the age-old secret sauce, but
also
helps in maintaining a competitive edge.
For instance
, the recipe for KFC Chicken lies solely with a few stakeholders of the family. Another advantage of having closely knit relatives in a
business
, is the factor of trust, especially when it involves highly-valued assets. To illustrate with an example, the diamond
trade
business
communities in Gujarat, India, are extremely wary of outside employees.
As a result
, their precious stones assets are held in the custody of only the family members.
Therefore
, businesses where the assets or
trade
secrets have a massive economical value, are often well-run by family alone.
On the other hand
, factors
such
as low market reach and slow adaptation to current technology and trends contribute to growth impediments for a family-run
business
. While the ultimate
business
owners will be adept in their
trade
, hiring external professionals with a plethora of relevant experience can bring additional advantages.
Moreover
, these professionals, especially in the marketing and technology fields can take the
business
to new heights. Having worked in other companies, these professionals bring in the current trend and can add to the growth of the organisation. Had the
business
been run only by a handful of relatives, it would be extremely difficult to expand it in various regions or parts of the world.
Additionally
, with added levels of technology, the
business
can cater to different segments and
hence
, bring in more revenue. A clear example of
this
is any big conglomerate which,
although
, started as a family-run
business
, reached great heights as many external stakeholders joined hands in the running of
.
To conclude, it is fair to state that the success of a
business
depends on the importance of its
trade
secrets/ assets. If these hold a higher economic value, it pays to have close-knit family members guard it.
However
, if one wants to expand, it is imperative that external professionals be hired as well.