50 Common Causes of Family Business Conflict ... and how to deal with them

Audio No 43. Poor Business Performance.

• Business performance, or more likely lack of, is a common cause of conflict.

• Some family members employed in the business may be underperforming, or sabotaging the efforts of siblings, resulting in poor business performance.

• Another cause of conflict is when employed family members continue to draw salaries, while non-working family members receive no benefits when profits are low.

• Suspicions can flare amongst passive shareholders that the books are being manipulated, despite knowing almost nothing about the business, when there’s a sense of entitlement to certain benefits.

• Ultimately, poor business performance can be used to heap blame on siblings / family members, justifiably, or otherwise.

Solution

• Call a family meeting and have the results of the business explained by a non-family, or external, accountant.

• Get the accounts audited (last resort, unless the business is large & the conflict is serious).

• Provide regular performance reports to upgrade knowledge, explain business issues & manage.

• Explore and mediate the underlying cause of conflict -

I'm interested in your thoughts and comments below.

#succession #business #conflict