CORE SCORE PROGRAM

FAMILY BUSINESS

WORKING WITH FAMILY BUSINESSES

Family businesses face unique challenges that can impact their entrepreneurial endeavors.


Some of the key challenges of family businesses include:

  • Family dynamics

    The interplay of family relationships and business can be complex. Disagreements over decision-making, conflicts of interest and differing visions for the future can create challenges within the family, potentially affecting the business's ability to make strategic decisions. The power of the past can be an obstacle. The power of the shareholder vote can restrict honest and open conversation.

  • Succession planning

    Transitioning leadership from one generation to the next can be challenging. Identifying suitable successors, preparing them for leadership roles and managing the emotional aspects of succession can be daunting for family businesses. 

  • Balancing family and business interests

    Family businesses often face the challenge of striking a balance between familial relationships and business interests. The personal dynamics and emotions within the family can sometimes cloud business decisions or hinder objective evaluations. Business owners oftentimes don't get the privilege to spend a full week disconnected from business and focus on the family. 

  • Professionalizing the business

    Family businesses may struggle with implementing professional management practices and systems. They may face resistance to change, especially when it involves bringing in external talent or expertise. Overcoming the "family-first" mindset and adopting best practices can be difficult. Entrepreneurs are their cheapest labor. They think they can just add this one more issue and they can solve it when their plate is already full.

  • Conflict resolution

    Disputes among family members, whether related to business decisions or personal issues, can significantly impact the business's functioning. It's common that business owners lose high-quality loyal employees because family conflicts are not resolved. Resolving conflicts effectively and maintaining healthy relationships within the family is crucial for the long-term success of the business. 

In addition, many family businesses also deal with these issues.


  1. Capital constraints: Family businesses often face challenges related to accessing external capital. They may be limited in their ability to raise funds through traditional means, such as, public offerings or venture capital. This can constrain growth opportunities and limit the business's ability to innovate.
  2. Continuity planning: Family businesses need to plan for unexpected events, such as, the death or disability of key family members. Developing contingency plans and ensuring the smooth continuation of operations is vital to mitigate potential disruptions. Technological and weather emergencies can destroy companies and put lives at risk. The health status of family members can also affect operations, morale and even ownership.
  3. Professional development: Encouraging and facilitating the professional development of family members and key employees is essential for the growth and sustainability of the business. Family businesses need to invest in training, mentorship programs, and external education to ensure a skilled and capable workforce. Family members cannot be exempt.
  4. Managing nepotism and favoritism: The presence of family members in the business can sometimes lead to accusations of nepotism or favoritism, which can demotivate non-family employees and harm the overall company culture. Establishing fair and transparent HR policies and performance evaluation mechanisms can help mitigate these challenges.
  5. Adaptation to change: Family businesses must be willing to adapt and evolve in response to changing market conditions, technological advancements and consumer preferences. Resisting change or relying solely on traditional methods can lead to stagnation or loss of competitiveness. Family businesses need to consider the business changes that occur when family status changes. Birth, death, marriage or divorce can change a family business.


Successfully addressing these challenges requires open communication, clear governance structures and a willingness to seek external advice and expertise when necessary. Family businesses that proactively address these challenges can increase their chances of long-term success and sustainability. It requires review of them as well.

Need Help WIth Your Family Business?

Core Score has helped many family businesses.

First consultation is free.