A Family-Owned Business

It is a type of business in which the family members join to work together, make decisions, fulfill
certain tasks and distribute the benefits fairly. It is good that the family remains together, as long
as one of its members doesn't interfere with his or her work within the company.

The challenges that the family has to face are:

It is estimated that more than 30% of family businesses survive up to the second generation and
that almost to a 13% survive up to the third generation.

Due to its nature, family-owned business have to face some unique challenges that any other
type of business has; such as: how to separate the family relationship from business; how to
keep a healthy relationship in the second and subsequent generations and how to plan the
successor and shares distribution.

Communication is key in this type of business, so that the effects of the family-company bond
are not negative. The grievances among siblings in this type of business are very common due
to social, professional, economic, and cultural differences. However, every member should try to
fix all their issues in order to avoid breaking the family relationship off.

The issue disposal of assets should be planned in advance. The most qualified member is the
one that must lead the business, as long as all the shareholders approve it.

Total transparency is a must within the business all the assets must be distributed conveniently,
all the legal requirements should be fulfilled to preserve the business’s identity; the
shareholder’s assets must be clearly and fairly defined; the results should be released and
every family member should be involved in the decision-making process and the strategies for
the succession process need to be outlined for the next generations.