Did you know that about 80% of all businesses in North America are family-owned and operated? And that family-owned businesses contribute to 50% to 70% of Canada’s annual GDP? So, chances are good you could run a family business one day, or at least entertain the idea. Here are some perks and snags of a family-run small business.
Family business perks
- You can count on family – family relationships are networks of support, assistance and advice.
- Families often have shared values, loyalty and commitment.
- You’ve got access to a source of investment capital – “love money.”
- The focus is on the long term, instead of on short-term profitability and the sale of the business.
- Family businesses are more profitable and enjoy a longer life than non-family businesses.
- Family members may be more willing to make financial sacrifices than non-family members, for the sake of the company.
Family business snags
- Emotions can get in the way of business and your workplace may become a whole new location for dinner table arguments.
- Many family businesses employ those who aren’t in the family. However, there is a high turnover rate of non-family member employees.
- Growth can be a problem if some family members are unwilling to put profits back into the business.
- Succession planning – finding the right person to take over – can be tricky. Emotions, pride and hesitation over discussing a relative’s eventual death may mean the business will eventually be left without a solid plan for the future.
- Family business tends to spill over into family time, making it hard to ever get away from the business, or to stop thinking about it.