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5 Dangers That Typically Sink Family Businesses

A family business can be great. You’re working with people who are closely related to you, which means solid trust is built right into the business. Even giants like Walmart and Berkshire Hathaway are prime examples of family businesses.

According to the US Census Bureau, nearly 90% of all businesses in the US are family businesses. But this doesn’t mean that family businesses are always smooth sailing. There are many dangers, some so serious that your business could go bust.

To help you identify and navigate these pitfalls, we’ve put together this guide.

 

Dangers to a family business

 

1. Running the business through emotions

One of the biggest mistakes you can make while running any business is managing it through emotions, and this is an even greater danger in a family business.

Getting feedback or criticism from your peers is challenging in itself, but when it’s coming from your family, it can strain and stretch relations and even sink your business. Emotions can also hinder your decision-making capabilities.

The situation becomes even more vexing if you’re directly managing a family member, as each word has the potential to be misinterpreted and can affect both your personal and professional life, so tread carefully.

 

2. Failure to implement efficient business tools

To improve the efficiency of any business, it’s important to leverage business tools, especially when it comes to sales.

Sales need to be monitored regularly and you need to have a detailed snapshot of who is getting what done.

Deploying an efficient field sales management software solution such as Skynamo, means you can seamlessly monitor your sales. This will help each family member understand how their efforts, or non-efforts, are affecting the company.

This can push them to take ownership and also helps avoid potential conflicts that may arise, since the evidence is there for all to see, and no one can say they’re being picked on.

Skynamo field sales app company home page screenshot

 

3. No formal succession plans

Nearly every family-owned company leader hopes to pass the baton to another family member when the time comes. Fulfilling that hope, though, can prove to be surprisingly difficult.

Only about 30% of family businesses make it through to the second generation and about 10% of them manage to last until the third. However, for a business to sustainably move from the first generation to the second, you need to have a formalized succession plan in place.

Yet only 34% of businesses have such a plan, which is dangerous: the death of an important member could leave your business in a precarious position, and the power vacuum might lead to clashes with the family.

interesting stats about family businesses

That’s why it’s absolutely critical to outline a succession plan and communicate the same with all your family members. This will ensure that your family business will be able to survive even the worst of the stormy sessions that usually bedevil succession.

 

Learn how Chantal Deacon Daniel (WD Agencies) had to take over their family business due to unforeseen circumstances, and managed to do so seamlessly thanks to the right technology.

 

4. Nepotism and personal bias

Personal biases can alienate your employees and coworkers, and is a particular danger if you’re running a family business where ‘outsiders’ are working too, and certain family members are seen to be favorites.

Employees just won’t see any opportunities to grow in your organization, and you may lose them, or productivity may drop.

Ensure you treat everyone in your company on merit. You should avoid nepotism at all costs and afford equal opportunity to all your employees.

 

5. Family Conflict and Disputes

A family feud – whether personally or professionally motivated – can lead to a complete collapse of trust that  can shake the very foundations of your business, and create a toxic working environment.

It’s critical that you address these issues and solve them early. Leaving them to linger in the hope that the situation will resolve itself could have dire consequences for your business.

 

Don’t wait for your family business to blow. Book a demo today and gain clarity on and control of your business while maintaining the family harmony.

Now is the right time to empower your outside sales team through digitization

Empower your sales team through digitization

Business owners and sales managers often share some scepticism related to digitization when having to choose outside sales software. This is understandable. Research suggests this most likely stems from past experiences linked to mishaps and inefficiencies that involved ineffective technology or clunky systems. But there is no better time to empower your outside sales team through digitization.

10 most popular Skynamo blog posts of 2020

Skynamo blog posts

Tips on how to realign sales strategies and business practices – in what has been the most difficult year of the decade and in many sales professionals’ careers – drew the most interest among readers. Other exciting news that was widely read and shared was the opening of Skynamo’s US headquarters in Atlanta. 

What’s the difference between sales force automation and CRM?

man shrugging his shoulders and lifting his hands in confusion

Many business decision-makers wonder about the difference between Field Sales Automation – Sales Force Automation (SFA) – and Customer Relationship Management (CRM). What do they do? How do they complement each other?

One of the fundamental differences between SFA and CRM is that while SFA looks after the entire sales process and tracks the efforts of salespeople and their face-to-face relationships with customers, CRM is all about customer profiles, data tools, office sales, account management and communicating with clients from a distance ‒ from the office, for instance.

Cutting sales costs is something you can control

External factors that shape the economy aren’t under your control. Skynamo’s all-in-one field sales platform helps sales teams manage what they can control in a cost-effective manner.

The effects of a global business slowdown are evident around us and affecting most of our businesses at the moment. We’ve previously highlighted what sets industry leaders apart in the new normal business environment and what sales teams are doing to build trust in times of uncertainty. When we become too obsessed with ‘doing better’ or ‘increasing sales’, we often overlook creative ways to manage daily business operations in a cost-effective manner.