In his book Family Business: The Essentials, Peter Leach summarizes what he sees as the strengths that family enterprises possess (see also Exhibit 5.2)
1. Family business culture and values, providing guidance toward accomplishing share goals
2. Commitment, the passion that grows out a family’s sense of responsibility
3. Knowledge, applied as a competitive advantage by family member who have learned through intimate involvement
4. Long-range thinking, looking toward the next generation, not just the next quarter
5. A stable culture, typically found in durable, low-profile niche enterprises
6. Speedy decisions, a function of trust among family members
7. Reliability and pride, recognized by customers, suppliers, creditors, and other outsiders
DISADVANTAGES OF A FAMILY BUSINESS
Evan before a venture is created, conflict may arise among family members. The spouse, parents, in-laws, or others may accuse a budding entrepreneur of putting the family at risk in launching the business. When this happens between married couples, the eventual result is often the failure of either the business or the marriage. From the perspective of the opposing family members, their position may appear quite reasonable. The entrepreneur may be gambling with retirement savings, the children’s college funds, or the home mortgage. Consequences can be severe.
As the business grows, inherent differences in family and business values and commitments emerge:
* A family is a unit that balances relationship; a business must deal with differences in competence and merit.