Heeding early warning signs can transform business risk into success
The decline of a family business can be heartbreaking. Often the extended family loses much of its fortune and the financial security of future generations is at risk. Why does this happen, and, if you are a family member who is not running the business, how do you prevent the decline? Minority family shareholders as well as controlling owners can learn to identify early warning signs and take steps to implement solutions that will transform risk of decline into success.
Powerlessness and fear
A family business is subject to the same fluctuations as any other business. Today, especially, the pressures are intense because change happens faster. But an additional element is found in many family businesses: A single dominant figure often exercises effective control. Business problems are exacerbated when the controlling figure is an aging patriarch/matriarch or a successor who struggles to meet current challenges. Other family members, even if they have an economic stake, often lack visibility into the family business and feel powerless to do anything but worry.