The highs and lows of family businesses

That the largest chunk of small-and-medium enterprises in Rwanda is operated as family businesses is no secret. This has seen some families proper, while others have disintegrated due to squabbles arising from the businesses. Note that starting a family business can be a great idea or a downright horrible one.

That the largest chunk of small-and-medium enterprises in Rwanda is operated as family businesses is no secret. This has seen some families proper, while others have disintegrated due to squabbles arising from the businesses. Note that starting a family business can be a great idea or a downright horrible one.

Benefits

The main benefit of a family business is that owners can feel more assurance by working with people they trust. “Family members are more likely to sustain loyalty and dedication to the success of the company,” an expert says.

“You already know the capabilities of your relatives or friends, which helps you assign them the tasks basing on their individual strengths,” explains Joseph Mubumbyi,” a business consultant at TM Consult in Kigali.

A family business also provides customers some sort of comfort, which eventually makes them loyal to the company. Also, young family members don’t have to worry about job-hunting. Many people always prefer working with people they know and can trust.

Because they have watched you or helped in running the business, family members come in handy when you want to hire a new person as they are already familiar with your company and how it operates.

No one would want to spend time training new employees to take over in case need arises.

“Family members and close friends are committed to you as an individual and to your company. Because of this, they may be more willing to work longer hours (such as evenings or weekends) when necessary,” said Augustin Rureba, the manager of Isuku Laundry and Dry Cleaners, a family business in Kanombe.

Low side

When one has a family venture, they should consider the fact that what binds together those involved in running the enterprise can also tear it apart.

However, all is not rosy with family businesses. Family dynamics impact on the operation of the business. Personal and business problems are tangled and extremely difficult to identify or resolve.

“The business may become a breeding ground for family problems such as jealousy and resentment. There is less reservation about letting feelings out among family members. Besides, family problems can easily spill over into the workplace,” notes Yovan Mutware, who operates Tubaane Bakery, a family business in Kinamba, a Kigali suburb.  

Also, some family members, especially the elderly, may refuse to retire and let the younger members take over since this kind of job has no age limit.

Mubumbyi also warns that it may be hard for a manager of a family business to turn down relatives as employees regardless of their qualifications. More so, relatives may abuse family ties and underperform, thinking they are indispensible. 

Other employees may feel jealous when you hire a family friend or member, thinking it is favouritism. This may especially be the case when one is promoted ignoring an ‘outsider’, who has been performing better than the family member.

Family businesses have an equal share of benefits and problems, so, before you open one, consider both aspects and prepare for them accordingly.

 

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