Something we see all the time is family businesses that are dysfunctional and struggling. There are several reasons for this, but they pretty much all boil down to a few key problems:
1. The business has been historically run by family, so there is no clear plan in place
2. Family members are employed because they are family, not because they have relevant skills
3. Family members take advantage of the business in a way they would never do if they were independently employed eg spending on company credit cards
4. Roles are poorly defined so it is difficult to measure performance
5. Ownership is often unequally skewed towards parents or other family members leading to resentment
6. Family finances and business finances get confused
7. People are reluctant to ask for advice because they are worried about airing family issues
In a recent issue of the CPA magazine “In The Black”, David Harland published a good checklist for things that family businesses should act on.
You can see David’s article here:
Michele Wise at Galloway recently spoke to a women’s business group on this issue and she has also seen these issues many times in her experience as an owner in a rural and agribusiness focused accounting firm.
To discuss your family business problems, give Michele a call at Galloway 0428 688 222.