Challenges to Overcome to Grow Family Business
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Table of Contents
Introduction
Challenges to overcome to grow family business
Conclusion
References
Introduction
Companies tend to face several challenges likewise in a family business. Most of these issues are even more complex when it involves family. Family businesses go through various phases of growth and thus resulting in such problems surfacing. Being a second generation entrepreneur, I am tasked with the responsibility to increase the growth of the business and in the meantime resolve some of these issues that occur in a family business. The chosen company is Eu Yan Sang and it is part of the traditional Chinese medicine industry.
Eu Yan Sang is a listed firm that sells traditional Chinese medicine. The firm has expanded rapidly over the past few years with physical stores located in Singapore and other parts of Asia such as Hong Kong and China. In addition, it has at least 25 clinics where people can go for health consultation. Previously, Eu Yan Sang only focus on selling herbs but currently, its mission is to be caring towards the society and allow people to live a healthier life through the consumption of TCM. Furthermore, the introduction of Eu Yan Sang clinics that provide services such as tui na, acupuncture are said to be beneficial for one’s health and well being. Euyansang (2016). Despite being one of the leaders in the industry, there is still room for higher growth and launching the business in other parts of the world.
Challenges to overcome to grow family business
There are several challenges that need to be resolved before proceeding to grow the family business.
Vision: Family members may have differing views on the vision and operational strategy of the company. Thus, a family constitution can be created to decide on the company’s vision. It is also responsible to keep a log on the family’s agreement and the solutions towards some issues. Eu Yan Sang’s vision is to help mankind and improve the health of individuals through the use of TCM. A clear vision is important as it can guide employees towards achieving the company’s objectives and it will prevent conflicts from arising. Evans, L. (2013).
Growth: Companies often encounter lack of funds to aid in the growth of the business. As such, it is difficult to compete with other large, established companies in the industry. Therefore, Eu Yan Sang can look into forming alliances with other companies and leverage on existing resources required for its growth. Also, it leads to the injection of capital into the company. Nonetheless, this must be discussed with family members before proceeding or it will create disagreements.
Control of Operations: It is always difficult to control family members and force them to work. This leads to family members not being participative in day to day operations and unconcerned with the company’s survival. Poutziouris, P., Smyrnios, K. and Klein, S. (2006). Hence, more supervision should be imposed and family members must not be given any special assistance and penalized for their poor performances.
Training: Training programmes must be arranged frequently and mandatory for family members to learn how the company operates. Besides external courses, Eu Yan Sang may utilize the online platform to organise classes for its employees. This is also more cost effective for the company and it can also equip employees with more knowledge. In addition, family members are encouraged to patronize the company’s physical stores to understand its operations and consumers’ behaviours. Also, through these training programmes, employees will notice that family members are not given special treatment and will respect them if they perform well.
Communication problems: Conflicts occur mainly due to lack of communication among people. This is worsened when information is not conveyed properly. As such, a family council should be set up. A family council can be explained as a group that is spearheaded by a family member where they can discuss certain issues and the manner in which the company should operate. In addition, they can increase communication with each other and brainstorm together for solutions to resolve issues. Deutsch, M., Coleman, P. and Marcus, E. (2006). This, it can boost teamwork and forge stronger relationships among family members.
Tunnel vision: A common challenge faced by the company is due to insufficient opinions by others as the management will often seek the family members’ opinions instead. Thus, it is recommended that the company should engage other professional advisors so that they can offer advices to the management. These advisors have the experience and skills required to give a true and fair view on the company’s current situation. Besides advising firms how to restructure to avoid paying high taxes as well as implementing various strategies, they can also educate family members to manage their wealth and also ease the tension among family members. Bernard, C. (2012).
Lack of written strategy: Companies will have lack of written strategies as there is no proper planning or any long term strategy