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Easy Steps To Ensure Everyone Gets a Fair Share and Understanding 

Every business will have conflicts, including family businesses. That is no secret. However, there will be times when family problems can affect the family business. It is not something that is pleasant and we are sure that every family business wishes to be managed smoothly

If the family business has a lot of conflicts, we all know where it is headed for. It may break and unmake the family business and take it down. Imagine what a waste it will be when all that effort is put into building the family business, only to have it come crashing down. 

Family Business: A Basic Understanding 

Family Business A Basic Understanding
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Most of us have a quick understanding of what a family business is like. Some of us may have even worked in one before. 

If you don’t know what a family business is, the idea is actually very straightforward. It’s basically still a regular business or company. The only difference between a conventional business and a family business? 

Have a look at the management people or the Board of Directors in the business. Most times it’s run by the parents or husband and wife. They can have their kids, immediate family members, and relatives all working in the company. In some cases, some (if not all) of the managers are their family members. That’s how a family business runs and operates. 

How to Avoid or Lessen the Conflicts in Family Businesses 

How to Avoid or Lessen the Conflicts in Family Businesses
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Having said all of that, here are 5 ways to reduce (if not entirely eliminate) conflicts in family businesses. You cannot remove conflicts 100%. Conflicts will forever be present in every business, whether it is a family business or not. However, you can lessen the problems that arise in your family business. 

1. Establish company roles among the family members 

Here’s the thing with running a family business: a lot of families don’t see how important it is to establish solid roles for every family member they appoint. Let’s say the couple has 3 kids, so they hire all 3 kids and put them in their company. 

However, each of these 3 kids doesn’t really have a clear goal of the job roles they are supposed to have in the company. That means the kids can simply take on the role as “commanding directors” and steer the company astray. 

That’s just one of the issues of not establishing clear roles for any family members who join the company. Most of the issues pertaining to family-run issues often relate to management and company shares. 

2. Having a formal family succession plan 

When the parents have passed away, who will take over the family business? It’s good to sit down with your kids and talk about this matter. In a lot of Asian families, usually, the eldest son will take over the family business. If the eldest son passes away before or after assuming his role as the company’s owner, then who will take his place? 

The hierarchy in a lot of Asian countries is usually passed from eldest son to next son in line. Patriarchal society, you know. If there are no sons, then the daughters will take over. The scenario can vary and a lot of times, it depends. 

Sometimes the eldest son does not wish to take over the family business. Who knows what their reasoning is. Maybe they are not into the whole company management thing, so they will get their parents to appoint their siblings or other relatives instead. 

3. Draft a legal agreement between your family members pertaining to the family business 

3. Draft a legal agreement between your family members pertaining to the family business
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This is a long process and we get that for some people, they may not like it. However, it is important that the family legalize a business succession plan for the family company. 

When you write a legal agreement for your family members to sign on, make sure it’s written in a simple language where everyone understands. Do not leave out any important information. Ensure that everyone involved and included in the legal agreement understands the clauses in it. 

It’s also good to include a lawyer as a witness when the legal documents are drafted. That way nobody can find a loophole and take advantage of it. 

4. Have clear goals on what the outcome should be for the family business 

Parents will not be around forever. One day they will pass away and leave the business behind to their children – assuming that their kids are nominated. As parents and owners of businesses, it’s good to sit down and have a detailed conversation on what will happen to the family business

Set clear goals on what is expected from the children when they take over the business. At the same time, it’s good to let them know where the family business is headed – should the parents pass away before their time.  

It’s a lot of things that the parents will need to discuss with their kids. It’s a family business after all. 

5. Allow ample time and space for the succession plan to come to fruition 

When the kids have finally taken over the family business, it’s pretty obvious that the company’s future will need time to adjust. The company will need time to ensure that the company is able to adapt to the times when the kids are spearheading the company. 

Maybe the parents may hand over the reins before they pass away. Even then, the company will need some time to adapt to its new management. There is no immediate remedy or solution to this step but for time to do its work. 


There are many ways the family business may or may not be subject to conflict. However, taking into account the above 5 steps, it can help decrease conflict in the family business.