Family businesses are vulnerable to special weaknesses that can sink the entire enterprise. Those that fail typically run into these common mistakes.
1. Guaranteed family jobs: Some owners place family members in leadership positions, even if they aren’t qualified.
2. Appointing only family to the board: Such familiarity among decision makers can, unfortunately, let personal issues seep in.
3. Making nonfamily employees feel like outsiders: Unrelated employees often feel left out, even if it’s unintentional.
4. Overreliance on family leaders: Lack of succession planning can lead to issues when leaders step down.
5. Skipping formality: Relaxed rules cause messy outcomes.