Family-owned businesses play a pivotal role in the business landscape, accounting for 19% of small businesses in the U.S. They not only drive economic growth but also make a significant impact in creating jobs, accounting for 78% of all new job opportunities. Additionally, family involvement is a driving force behind the establishment of 77% of new businesses in the U.S. 

This article delves into the advantages and disadvantages of starting a family-owned business, enabling you to make informed decisions about your entrepreneurial journey.

Benefits of a Family-Owned Business 

Families operating businesses together enjoy the unique advantage of spending quality time together, fostering strong personal and professional bonds. These connections often lead to the creation of enduring traditions that contribute to the cohesion of work and home life.

• Enhanced Performance: Research shows that family-owned businesses tend to outperform non-family businesses. These businesses exhibit a 6.65% higher return on assets compared to their counterparts. Such improved performance stems from the alignment of values and objectives among family members.
• Dedicated Employees: In family-owned businesses, employees develop a deeper sense of connection to the business’s owners, values, and mission. This often results in fewer human resources-related challenges, as staff members are more invested in the success of the company.
• Pre-established Trust: Trust is a foundational element in any business, and in family-owned ventures, it comes pre-established due to familial relationships. Team members already understand each other’s strengths and weaknesses, encouraging greater collaboration from the outset.
• Flexibility & Adaptability: Family-owned businesses commonly require employees to wear multiple hats, which encourages versatility and adaptability. Team members can explore roles that pique their interest, and the company benefits from a workforce willing to step in where needed.
• Legacy Building: More than 40% of family-owned businesses involve younger family members in the business, laying the groundwork for the next generation. Integrating family members early on enables business owners to strategically plan for the company’s future.

Challenges for Family-Owned Businesses

While there are several reasons to start a family-owned business, there are some concerns to consider. Combining business and family can bring about unique and challenging distractions, conflicts, and emotions. Increased planning and forethought can help overcome some of these challenges, but it is important to think through any potential issues before starting your family-owned business. 

• Familial Conflict: Intertwining family dynamics with business operations can lead to conflicts. Emotions can complicate decision-making, and maintaining a clear boundary between work and home life may become challenging.
• Balance Work & Family Time: While spending time together can be enriching, excessive overlap between family and work can result in burnout. Striking a balance between personal and professional life becomes imperative.
• Lack of Structure: Maintaining a strict organizational structure in a family business can be challenging. Family members might not feel the same external pressure to perform, potentially leading to relaxed policies and procedures.
• Reduced Revenue Streams: Family businesses tend to excel in long-term planning, helping them weather economic downturns. However, they might limit their revenue streams by operating exclusively within the family circle. Relying on family members as the sole workforce can hinder diversification.

How Franchising Overcomes Obstacles for Family-Owned Businesses 

For those seeking to establish a family-owned business, franchising presents an opportunity to overcome common obstacles. Partnering with established franchises like Screenmobile offers a supportive framework to mitigate family conflicts and implement efficient operational structures. 

By leveraging the expertise and resources of a reputable brand, burnout can be minimized, processes streamlined, and business growth facilitated. Furthermore, franchisees can receive guidance for succession planning, ensuring a smooth transition to the next generation.

Contact us today to learn more about Screenmobile’s unique franchising opportunity for family-owned businesses.