Challenges Facing Family Businesses and How to Overcome

By Soko Directory Team / February 24, 2016



Challenges-facing-women-entrepreneurs

The incidence that took place at Tuskys Headquarters on Tuesday where the Chief Executive Officer Daniel Githua was forcefully thrown out of office brought to light what family businesses go through. Mr. Dan Githua who has been at the helm of the second largest retail store in the country was thrown out by siblings of the director.

Tuskys is a family business run by seven family members. The siblings have been logging heads after it emerged that close to 1.63 billion shillings had been misappropriated. This forced them to hire a non-family chief executive officer for the first time in 25 years with the hope and expectations that he would streamline things at Tuskys.

This, therefore, begs the question, what challenges to family business face:

  • Leadership

Family business are good and bound to bring in good returns only if there is a well-structured leadership. Many family business are often brought to their knees because of leadership rankles. The glummer for power among family members usually divergence the sole purpose of setting up a business and plunge the business into a loss-making entity. Sourcing a leader from outside and not within the family is always the best idea.

  • Mistrust.

Family members do not often trust each other whenever they do business together. It is always the one in a higher position being accused of ‘stealing’ even if nothing is getting lost. A good business is built on trust and on freedom to freely operate. In a case where there are accusations and counter-accusations among the siblings who own the business, the business is bound to fail.

  • Succession

This is what has killed many family owned businesses especially those where a father was in charge. Many people fail to provide a succession plan in an event where they die or too old to carry out administrative duties. It is always wise as a family business leader to groom a successor and make sure others know of so that when that time comes that you can no longer carry out your duties or you are dead, the successor take over.


Article by Juma Fred.

 



About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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