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Public businesses and family businesses have different circumstances from each other. In this article I will try to address some of the differences between each type of business, in order that owners of family businesses who are reading this article, may find out how to minimize their weaknesses, and improve their strengths. Here 4 of the largest weaknesses of owning a family business: 1) Nepotism Sometimes the owners of family businesses feel an obligation to hire family members rather than hire someone else who may have better credentials. This causes many problems, and can even cause a company to go out of business. 2) Different Goals Often small business owners may have different goals than there companies success. There may be certain charities which the owner feels strongly about, but, cost the company more than it can afford. Publically owned companies can't really do this, because of legal reasons, and negative critisism that they will recieve. 3) Less Care about Profits Many small business owners, specifically family businesses, have a tendency to look for non financial things. They will often try to do things that don't bring profits to the company. They will often try to lower their price to make there customers happy, even though they can't afford to do so. 4) Less Profit Margins Public companies have an easier time mass producing items, and thus they can get larger profit margins. Often the profit margins are twice as large in public companies. Now, I'll mention the strenghts of family owned businesses: 1) Loyalty In family businesses it is rare to find turnover, specifically in management, This makes it easy to keep employees for a long period of time, who know what they are doing. In non family businesses employees/managers will often go to a different company in order to get an increased salary, or worse yet, they will start their own company in direct competition to yours. Even if a family member does decide to quit there job, it is very unlikely that they will compete against you. 2) Greater Sacrifice Family members in family businesses are often willing to work longer hours for less pay, because they know that they are helping their family out, and that they are making the company stronger for their kids, and grandkids. 3) More Concerned Employees In small family businesses the employees are concerned about their companies success. In public companies the employees often just expect to work a 40 hour workweek, and then go home, not thinking about their job untill when they go back the next monday. 4) Teamwork In family businesses members don't have to question the others motives as often, because they are related, and thus working for a common purpose. In public companies however they may try to do things that hurt others in order to get ahead. It is essential that small businesses recognize there strengths and weaknesses so that they can use them to there advantage. Doing so will help them make more money than they had previously.
Article Source: http://www.articlegush.com
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