Family businesses account for more than 75 percent of businesses in New Zealand yet for many, it’s not plain sailing. Unfortunately, family conflicts are common and often lie at the heart of the relatively high failure rate of small businesses.
Many families think that because theirs is a family business they don’t need to have the formal control systems and formal structures found in most businesses. But this is often their downfall. While things may operate well initially, with little sound planning and no formal structures in place, family disputes are likely to erupt and problems arise sooner rather than later.
Because of these problems, it’s prudent for families and family businesses to agree on a formal structure so that issues arising within the family business can be discussed within set parameters and sorted out before the issue threatens its very existence.
It’s also a good idea to distinguish between family issues and business issues and make sure everyone keeps them separate.
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