What is a Family business ?
Are you planning on starting your very own family business? Then this read is for you. Family businesses are very rewarding, it’s all in your control, your family is involved and what better partners than your own family to work with.
This type of business is very a popular commercial organisation. It is based on multi generation dimensions. In fact most businesses around the world come under this type of business function. From small shops to multi national companies, these are all under this type of business commercial organisation.
How to make a Structure:
There are a lot of family businesses which are very successful today such as, walmart (united states), Tata group (India), Samsung group (korea) and many others etc.
A family must have control off more then 50% of total voting power. In case of a public listed company, a family must have more then 32% of the voting power.
In this type of business, the owner and manager are usually the heads of the family too. This allows the business to strengthen as they all are working with full loyalty and dedication towards the work.
It does however also have a disadvantage, if the owner and manager are belonging from their own family, there can be dynamic in the family system. The dynamic of the business system can both become unbalanced.
In america 90% of businesses are a family owned business.
Maximum number of employment and half of gross national products (gnp) are provided by the family controlled business.
Employment qalification need:
We also found that family controlled businesses often faced pressure from their relatives and friends in their own family even if they were deservable for their work.
Salary’s and profit division among family member’s can be another big challenge faced. The family business will have to provide salary or salaries to the family employee’s and profit to the non family employee’s.
In small businesses the main motive is expansion of the company. Hence at the beginning there can be tight budgets in providing salaries to each member.
The advantages of family business :
- Stability : in case of family firms, a leadership control of companies lies in the hand of family members for longer time. Leader’s usually stable in their business for their whole life time until the events of death, illness and retirement.
- Availability funds : In case of this type of business, the money is always available in the business and their having less percentage take in the company.
- Voting rights : In matter of this type of business , Which also lies in their hands. They have the decision making power in their hands.
Disadvantages of family business are:
- Conflict’s : In this type of business, the conflict between members arise due to some profit dividing problem’s, succession problem’s and many other matter’s can exist.
- Nepotism: Some family member’s get advantages or Favourite positions from the other member’s of the company . Some members are treated as an ordinary employee and have no value’s.
Overall working in a family business can be more promising than working individually or with a group of people you hardly know (a.k.a business partners). If you ever feel like giving up, family will always have your back and pump you to recontinue. The mottivaion is endless.
Do you own a family based business? Leave me a comment below.