I wonder why many people prefer to introduce their siblings or relatives to form partnership in business. This is not a good ideas. It is not going to work at all. The end result is fatal. It is better individual run his own business. I'm not saying their businesses could not inter related officially. The reason why I said family partnership is bad is that their family would be acting as third force to influence decision making of the business.
Why it is not ideal to run family business
- Thread starter hastral45
- Start date
Well, there are some successful family businesses around the world. I don't see anything wrong in doing this kind of business especially when people involved knows their onions in the business world. There should also be some level of discipline.
Some of the most successful businesses in my location are run by families. They are listed companies in the stock market. Family members hold key positions in the company. That said, they've also hired talented professionals to work in the management team.
- Thread starter
- #5
That explains why some family businesses don't last long like their counterpart entities.
Squabble in the family could cause mismanagement in the business which may possibly leads to the end of the business.
Most small companies here are family owned corporations. As long as the articles of incorporation and bylaws are well established I don't think there would be some problems.. If you want to do business alone one can choose being a sole proprietor but this is only advisable to small businesses.
- Thread starter
- #11
Revenue sharing might not be a problem because right at the formation of the business it must have been decided how the profits is going to be shared based on each capital commitment. One major problem is the issue of family interference in the decision making
Probably, I think it is important people know about this. A lot of successful businesses around the world are family businesses. Of course they always hire professionals who will do the job perfectly for them.
Did the sharing formula made at the formation of the business cover the children who didn't contribute any capital? Revenue sharing is a big problem here.
Running a family business may not be good because it will be hard to say some things that may not be pleasant. And you will also want to have a good out come
most of the successful family businesses have seen have no problem with sharing formula. the truth is that almost every business will also be inherited by family members especially the successful ones.
- Thread starter
- #16
The so called successful family businesses you are talking about is just like a person sitting on top of dynamite. The problem might not manifest now but in future. Go to courts, you will notice series of litigations instituted by family members over property inheritance sharing formulas which some stakeholders considered injustice.
It actually depends on the kind of family in question though. I believe that when a family is close knitted with a strong sense of understanding, running a family business can be ideal.
For me I don't really see anything wrong with running a family business. All you need to do is to employ only those that you know they are capable for the work
We are talking about the conflicting interests of the family members in the business. It could be operational or financial. That's what we are debating about.
I do not think that running a family business is not ideal . It is in fact a good idea.
