BUSINESS MENTOR: Growth Pains in Family Business

By Armando “BUTZ” Bartolome

It is not always easy to start something, particularly if you have in mind is to start a business. It takes a lot of time and effort before you can actually say that you have perfected the formula that you need in order to reach your goal. But of course, it is never a smooth ride. But through these bumps, an entrepreneur is able to devise a plan that can help strengthen the business, as well as empower himself.

Did you know that about 80-90% of all businesses here in the Philippines are family businesses? In fact, most of them are among the biggest businesses in the country and have diversified into several other industries that have lived through generations. We all know how they started from humble beginnings and eventually became huge brands. And you can just admire how much dedication they have to pursue their dream and leave a legacy that will truly last for so many years.

Starting a Family Business

How does one start a business? It is a very common question among those who would like to try to take a different direction in their lives. Most people these days have started with their own small business. They no longer rely on their 9 to 5 jobs because, as we all know, unless you have a high position in the company, then your salary is just good until even before the next month’s pay. So, to find ways on how to better support the family, involving with a business is a surefire hit, for as long as you made the right steps.

First and foremost, you need to choose a business that you are really interested in, something close to your heart. I believe that a business becomes more successful if the business owners really know about it 101%. Some may barely have knowledge about the business, but the willingness to learn and train is a huge factor that every entrepreneur should never neglect. 

After building a business, it comes to a point that there is a need to step down and let the next generation have control over the business. Now, passing the reign is not easy, particularly if the matriarch or the patriarch is still very aggressive even after their prime years. And that is one of the common problems that family businesses encounter. It is hard for modern-day entrepreneurs to allow their mother or father to agree on certain decisions because they refuse to do it with the modern approach.

The success of a family business relies on not just the people that help the business, but most importantly, the kind of relationship that the family members has.

Common Problems Encountered by Family Businesses

Some would think that since family members are working together that the debates, discussions, and misunderstandings would be eliminated. In fact, it is even harder to be in such a situation because sometimes, personal problems are not left at home and are carried out all throughout while working in the office. Therefore, sometimes, one simple problem could escalate because they have personal unsettled issues among themselves. It is harder to work burdened with family issues. And this affects the whole workplace which eventually could lead to the suffering of the company.

Problem #1: Miscommunication/Misunderstanding

The head of the company may have a vision on how to place the company in a good spot in the market. However, not being able to thoroughly explain the vision to others may result in confusion and not being able to execute the plan properly.

With planning, it is important that whoever the leader is, to clearly explain what needs to be done and ensure that everyone is on board with it. Otherwise, leaving some members in the dark may start a new squabble among them.

The family must create stability among them. They should be united in all decisions for their plans to take effect positively. The kind of relationship that family members have reflects the whole company. And employees can feel the tension even if they don’t see the family throwing stones and rocks at each other. Good business governance is needed so that problems can be identified, solutions can be created, and plans can be executed as one.

Problem #2: The roles and responsibilities of each family member are unclear.

I do think that although family members have the same goal, not each one has the same thoughts about how to take their responsibilities for fear that when something goes south, that they would be solely blamed for it. While each family member may have a say on certain decisions for the company, it is highly recommended that the role of each family member should be spelled out clearly to again, avoid confusion and to give more time to their department. Each family member should take charge of a specific department so that they know everything that is happening in the business. A monthly meeting is advisable. Allow each one to give their suggestions and then discuss the pros and cons until you reach the right strategy or solution.

Each member should realize that the family business would only be successful if it is because of all their joint efforts. Fearing accountability should not be in their minds. Otherwise, the family business would just go down the drain.

Problem#3: The drama at home persists in the workplace.

As I have mentioned earlier, squabbles between family members are not impossible. And unfortunately, some of them hold grudges that affect their performance in the company. Not seeing eye to eye on the plan that has been ironed out may mean the downfall of the company. Lights can easily break out when personal issues are not left at home. 

It is likely that there would always be discussions among family members, particularly if suggestions thrown out may seem workable. Therefore, all they have to do is to lay down their thoughts and think things through, weigh-in which one would be more beneficial on a long-term basis. To be sensitive when decisions are needed to be done could not move the business forward. Sometimes, there is just a need to listen to reason and think about what is good for the company and leave personal matters behind.

Running a family business is a remarkable way to bring your loved ones closer and create a lasting legacy. A misunderstanding may not be avoided sometimes, but despite this, it is still possible to include everyone who wants to participate and work toward a common goal.

By having better communications, pointing out roles and responsibilities, and being active in managing the family business, challenges that come your way will not be as burdensome and that you will surely become successful in your venture in which you can pass for generations.

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For feedback, you may email business.mentor@butzbartolome.com or visit https://www.butzbartolome.com