Family problems will affect the business
Absence of clear policies and business norms for family members
3. Tunnel vision:
Lack of outside opinions and diversity on how to operate the business.
4. Lack of written strategy:
No documented plan or long term planning.
5. Compensation problems for family members:
Dividends, salaries, benefits and compensation for non-participating family members are not clearly defined and justified.
6. Role confusion:
Roles and responsibilities must be clearly defined.
7. Lack of talent:
Hiring family members who are not qualified or lack the skills and abilities for the organization. Inability to fire them when it is clear they are not working out.
8. High turnover of non-family members:
When employees feel that the family “mafia” will always advance over outsiders and when employees realize that management is incompetent.
9. Succession Planning:
Most family organizations do not have a plan for handing the power to the next generation, leading to great political conflicts and divisions.
10. Retirement and estate planning:
Long term planning to cover the necessities and realities of older members when they leave the company.
There should be a specific training program when you integrate family members into the company. This should provide specific information that related to the goals, expectations and obligations of the position.
Control is centralized and influenced by tradition instead of good management practices.
13. Overly Conservative:
Older family members try to preserve the status quo and resist change. Especially resistance to ideas and change proposed by the younger generation.
14. Communication problems:
Provoked by role confusion, emotions (envy, fear, anger), political divisions or other relationship problems.
15. Systematic thinking:
Decisions are made day-to-day in response to problems. No long-term planning or strategic planning.
16. Exit strategy:
No clear plan on how to sell, close or walk away from the business.
17. Business valuation :
No knowledge of the worth of the business, and the factors that make it valuable or decrease its value.
Problems due to lack of capital and new investment or resistance to re-investment in the business.
Each family member has a different vision of the business and different goals.
20. Control of operations:
Difficult to control other members of the family. Lack of participation in the day-to-day work and supervision required