Date: 15/11/2016 | By: Ian


If you’re involved in running a family business then you’ll be aware of the unique stresses and strains that are involved.


While every family business is different, they do tend to have certain issues in common.


Find out more about how to avoid or deal with these issues by listening to Ian Priest’s webinar on the topic. Click Here 



Each and every family business is unique but often, sadly, there is the potential for a big family fallout or huge problems in the business as a result of the family dynamics.


It’s vital to deal with any issues sooner rather than later, before they tear the business or the family apart.


Family businesses come in all shapes and sizes from “one man band” sole traders to huge limited companies e.g. Clarks Shoes.


My good friend, Peter Roper, has identified three key drivers in a family business, whatever size they are:


  • Filling the fridge – providing for their family and the employees and their families
  • Sleeping at night – they want to deal with people like themselves motivated by doing the right thing rather than ripping people off
  • Doing business with people they know, like and trust – because life’s too short to deal with anyone else


If you’re running a family business then I’m sure you’ll agree with these three principles, and if you’d like to deal with family businesses then ignore these at your peril.


However, let’s not focus on dealing with family businesses, but on the tensions and pressures within them.


Family businesses do things differently, and the main reason for this relates to the personal relationships within the business – especially the relationships between the business, the owners and the family.


This includes:


  1. The family members who work in the business
  2. The owners of the business who are not family members
  3. The owners of the business who are family members but don’t work in the business
  4. Potentially the most lonely of the lot – particularly if its one individual – the owner that works in the family business.



Running any business can be a lonely place, but in family businesses in can be especially lonely as you may not want or be able to confide in your spouse, your parents or your kids on the issues and problems.


Everything sits on your shoulders and it’s very easy to be crushed by it. If you are in this situation, BizSmart’s SmartBoards can be a great way to shift this burden in a completely confidential and non-judgemental way.


The business and the family:


  • Which family members are in the business?
  • Which family members are outside the business?
  • Which family members “expect” to be in the business?
  • What is the relationship / attitude of non-family staff?


With expectations, rivalries and resentments, it’s easy to see how problems could arise.


It’s vital to manage expectations from an early stage regarding whether a particular family member will have a role in the business. It’s no good hoping that the nephew you don’t want to be involved will lose interest by the time he’s old enough to come on board!


The owners:


Are all owners remote or are some involved in running the business? Remote owners will often want to have a say in what’s going on – especially with regard to dividend policy and remuneration – even if they’re not involved in running the business.


Even if all the owners work in the business there can still be conflict – often due to family quarrels or misunderstandings.


It’s important to head these issues off as far as you possibly can. Call it “Planning the divorce before the wedding” if you like. Get a decent shareholders’ agreement drawn up by an experienced lawyer that sets out how things will be handled.


It’s much easier to agree these things before there are any fallings out.


If you have external owners consider a family charter that sets out how the family will interact with the company – who has what powers, who shares can be transferred to and what permissions are needed to transfer shares. If your business is of a reasonable size have a proper board structure with non-exec directors to represent the interest of family members.


The family and the owners:


Don’t leave the ownership of your family business to chance. If your business will pass down through the generations you may find a substantial share of it ends up in unexpected hands, via death or divorce, so it’s important that everyone with a stake in the business has a clear will and that they understand the implications of who they are leaving their share to.


Next steps if you’re a family business:


  • BizSmart has the contacts, the resources and the people to help you deal with these issues
  • Make use of the website and webinar back catalogue
  • Call one of the core advisors or select members for specialist advice

Find out more about how to avoid or deal with these issues by listening to Ian Priest’s webinar on the topic. Click Here 

For more information on this topic, speak to Ian Priest of Independent Banking Consultants via or or call him on 07917 355751.


BizSmart aims to help SME and micro-business owners scale their businesses and create value through sound practical business support. We aim to give you insight and clarity and fire up your determination to succeed. You can access blogs like this and more besides through our free SmartRoom service here.