Some people dream of running a business with their family and loved ones in which key positions are held by family members and all major decisions made by the family alone. This may all sound good and promising, but once put into practice, family and business do not always get along well. While many family-owned and operated businesses are blooming, others – even some long-standing family businesses – navigate some tough times.

Thus, what are the benefits of having this kind of management in the first place?

A greater incentive to work hard. People will work hard if they work for themselves, and same goes for the family. The collective zeal, enthusiasm and energy of all family members will be higher if they work as a team for a common purpose rather than working individually for different companies.

Family members acquaintance. Doing business with family members means you already know the personalities and abilities of your partners and collaborators. Assigning roles and responsibilities will be much easier. Working together as family also creates a more relaxed work environment, since you know everyone's likes and dislikes.

Training time discount. Family members are already familiar with the nature and structure of their business. This reduces the time and effort involved in training new hires and speeds things up.

Work schedules adjustment. Family members can get each other covered when needed and in case of unforeseen circumstances. Likewise, an employee is more likely to put in the extra effort to compensate for the loss caused by someone else's absence.

What are the disadvantages that are mostly found in family businesses?

Difficulty to separate family from business. Working with family members can mean taking your work home or dragging a family issue to work. The separation between personal and professional life may be unclear, or even absent. When family and work encroach on each other, it can affect the health of the business such as sales, revenue, and customer services.

Vulnerabilities. In the event of a divorce or massive dispute between family members, the business will certainly suffer. You could end up losing part or all of the business because of the strained relationship between family members. Split businesses can become temporarily unstable, or in the worst case get dissolved.

Disciplines. Family members may tend to think they have special privileges over normal employees and may feel entitled to not follow established rules. Arriving late at meetings, leaving the office early, not submitting reports on time, putting off important work for personal work, and other such things may be common. Employees behave this way when they feel free to do so and when they know they cannot be dismissed.

Too many leaders. If roles are not defined properly, other non-family collaborators may receive different and opposing orders from their leaders. If everyone feels they have an equal voice in the business, it can lead to discrepancy and chaos.

In some ways, being part of the family business and carrying on the legacy can be very exciting. However, for some people, it can be limiting and can lead to conflict with family members. It is important, therefore, to keep in mind the pros and cons of running a family business before you decide to make it a reality.

Sources: The Economic Times, the book “Guide to Family Business” written by Peter Leach, Tony Bogod, Business News Daily