Family businesses often start out small and grow over time. Such a close-knit business plan is one of the most common models of economic organization. Family businesses have been in existence for centuries. The tradition of a father passing his business on to his son has created solid businesses that have long standing client relationships.
Family businesses can also create strong familial ties. The company becomes a family tradition that can survive multiple generations. However, this fact also can create emotional conflicts within the company.
The challenges for families who own and run a business is the priority that is placed on the emotional response to success. The success of the business is paramount to the current generations who want to honor their grandparents. If a family-run company fails, it can cause anger and disappointment throughout the entire family.
Maintaining the success of their ancestor’s establishment is not the only challenge. Nepotism can also play a part in family businesses. It can be difficult to avoid placing an unqualified family member in a position rather than a qualified and experienced non-member. The best way to maintain a family business is to keep business life and family life as separate as possible.
Clayton Perlman has worked with family businesses in the past. Between 1986 and 1989 he worked for Perlman Properties, his family real estate business. He was first the superintendent and then worked in acquisitions. Perlman began his career in his family business, where he learned about real estate development and what it takes to make a business successful.