The challenge of running a Family Business
In the United States, families own about 85 percent of all business. However, less than 30 percent of these companies last more than 20 years. The companies fail, and the owner can't pass down the family businesses to their sons and daughters. Why is it so difficult for family bussinesses to survive?
One reason may be changing times. Fifty years ago, many families owned local grocery stores can not complete with large supermarket chains. Today, most Mom and Pop stores are a thing of a past the way of life is another challenge in a family bussiness. A successful company requires hard work and long hours. Younger generations may not went this lifestyle. They ma more freedom. In addition, sons and daughters may not have the same enthusiasm for the business as their parent.
A successful family business depend on the family's strengths and talents. However, families also bring their weaknesses and personal problems to the workplace. Many families do not communicate well, and they are not good at solving problems together. These challenge often cause businesses to fail. According to professor Randel Car lock these problems are common. He says, "Being part of a family is very busiess is even more difficult." Love is important in a family, but love is not enough to run a family, business. The business must achieve financial success.
The Bancroft family is an interesting example. For 105 years, the Bancroft family owned The Wall Street Journal. It is one of the most famous newspapers in the United States. But there were family problems. They did not communicate well, and thy disagreed about many things. One person said that they couldn't even agree on where to go or lunch! The younger family members wanted the business to be more profitable. The older members thought the quality of the paper was more important than making money. In addition, the family let people outside of the family manage the newspaper. They did not take part in many important decisions. Finally, in 2007, all 33 of the Bancroft family owners agreed to sell the company. Although the business had lasted several generations, the Bancrofts eventually had to sell their company because they did not manage it well. In the end, many of their family relationships suffered.
Many families dream of passing down their businesses to the next generation, but this requires careful planning and preparation. Good management is a key to success. All employees, especially family members need to have clear responsibilities. Family business owners need to thing about how decisions are made. Also, they should be realistic about the dreams and goals of the younger generation. Family businesses can be successful because of strong family ties. But to succeed for more than one generation, families need to manage their businesses carefully.