WHAT CAUSES THE FAMILY BUSINESS TO FAIL

Why business familly to fail-Business to faill | It happens that a very large percentage of automotive dealerships around the world to expect a family owned business. Therefore, there are many big issues regarding family-owned companies, especially about the succession and management, which must be dealt with so that companies can achieve the goals that define the family. Autologica presents a series of articles titled “Common Problems in Family-owned Business” based on interviews between JC Aimetta, an expert and trainer who specializes in family-owned company, and Al McClymont, CEO of Autologica Dealer Management System (www.autologica.net). JC Aimetta is 46 years and has dedicated the past 15 to help the owner and director of more than 65 family-owned small and medium businesses manage growth, professionalise their management and prevent problems with succession. He has been a negotiator in the sale of family conflict and family-owned business. Mr. Aimetta teach subjects in undergraduate and post-graduate in three universities of Argentina, and has given conferences in Panama, Guatemala, El Salvador, Costa Rica, Colombia, Ecuador and Venezuela. Here are some thoughts that emerged from the interviews. Al McClymont: I know this is a vast subject to be treated within a short time, but I hope we can go through some major points. The first thing I want to ask you is: What do you think is the main reason a family owned business could fail? Aimetta JC: Well, the main reason is that the role of owner and manager intervened. Thus, the number is much confusion occurred as the owner and who is the manager, administrator. For most family businesses is only one role. Therefore, every time you ask someone, Why are you running this business, the answer is:? Because it is mine. And what empowers you to run a business? The fact that it is mine. Al McClymont: It’s also important to analyze this from the point of management and operational side of the display, for example, when the sons and daughters of the owner reaches the right age for them to work in the company. Aimetta JC: Well, what happens is that the new generation develops and children inherit the same idea, and believe that they can manage their own business just because. As children are generally more, two, three, four … companies can not have four managers. And at that time most of the confusion appears. One thing to remember is that in the long run the family always grew more than the company. In other words, there are more people intend to live from a business that is not growing as fast as a family. If we also consider in-law sometimes, not always, want to work in family businesses, conflicts may arise. In addition, we must remember that the evaluation work carried out under the emotional parameters. That is, every time you are employed, it is very difficult to punish lackluster performance, a bad job. Because the emotional cost is paid, a “happiness” costs. In short, a family owned business to maintain a balance between happiness and efficiency, profitability and affection. As the business grows, the owner should try to gently tip the balance to one side. Since it is impossible to simultaneously achieve maximum profitability and maximum happiness, and make the happiness of the whole family grew it depends on one particular business. In the next part of this interview, we will talk about the problems that may arise in a family-owned business when one family member wants to sell their shares of the company.

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