A successful family-owned business can be the cornerstone to creating ongoing inter-generational wealth for a family. You don’t have to be as successful as family-owned businesses like Heineken (Beer), Samsung (Electronics), Walmart (Retail), Volkswagen and Ford (both Motor Vehicle manufacturing) or Berkshire Hathaway (Investments) to create this wealth.

However, working with family members can create some unique issues that spread outside the workplace and beyond the boardroom.

For some examples where the family business isn’t always smooth sailing, you could refer to the Godfather movies (though that mafia family didn’t play by conventional business rules), the recent TV series Dopesick (relating to the Sackler family and the Purdue Pharma drug scandal), or almost any episode of Gordon Ramsay’s Kitchen Nightmares (many episodes feature conflict within family members running their restaurant).

Here are 10 of the most common issues.

• Family problems

What’s happening at home can affect the business and vice versa. The effects could be emotional, physical, or financial.

• Informal culture and structure

Often the business operates like the home environment leading to relaxed uncomplicated business operations that lack appropriate business documentation, policies, strategy, and goals.

• Pressure to hire family members

This can lead to hiring children, in-laws, and wider relatives who lack the skills and experience the business requires.

• Lack of training

Many family businesses have an informal culture that fails to properly train new employees to the required standard. This compounds the problem from the previous point.

• High turnover of non-family employees

Non-family employees may feel that the best roles in the business will only go to family members or may not fit into the family culture and will constantly be seeking work elsewhere.

• Sources for growth

In trying to establish the business, finding capital and resources to enable growth can be difficult to find. Often personal assets like the family home are placed at risk to take on debt. If the business fails, the family might lose the business and the family home.

• Lack of an external view

Because all family members usually have a similar upbringing and life experiences, their views will often be similar. Someone with a different background may have a different view of the business and the competition. This external view can bring new ideas and strategies.

• Misunderstanding the value of the business and how it is to be divided

Many family members lack the understanding of how businesses are valued and what their contribution is worth in terms of an ownership stake. This also relates to who gets how much of the profits.

• Who will take over the business?

Many family-owned businesses do not plan for how the business will be passed on to the next generation. This can cause a lot of stress within the family unit when a new leader is required.

1. No exit plans

Like succession planning, family businesses usually lack any strategy around family members retiring or wanting to sell their share of the business. There needs to be future planning in place.

If you look through these Global Resources reviews, you’ll see examples of how we can help businesses facing these kinds of issues.