Discover the biggest challenges that family-owned businesses face and how to overcome them. Learn from experts and gain insights to ensure the success and longevity of your family business.

1. CENTRO LAW
Although the backbone of many economies and often very successful, family-
owned businesses face particular difficulties. The intersection of business and
family is difficult to manage and requires specific attention. Here are three of
the biggest threats, insights, and guidance on overcoming them.
WHAT ARE THE BIGGEST
CHALLENGES FOR FAMILY-
OWNED BUSINESSES?

2. SUCCESSION PLANNING
1.
According to research, family-owned businesses face severe challenges due to the
lack of succession planning. Without a smooth leadership transition, they risk extended
periods of uncertainty and misalignment with their strategy.
The separation of management and ownership often leads to sustainable results and
clarity for everyone involved. Thus, developing guidelines and policies on how
leadership is performed and family members' concrete roles and responsibilities is
essential.
Formal rules and processes will manage expectations, avoid leadership vacuums and
ensure business continuity.

3. Ownership is another issue that family-owned businesses need to address to ensure
their longevity. There is no standard setup or formula; thus, each family must define
their ideal framework for generational wealth preservation.
Trusts and foundations are ideal vehicles to structure business ownership and
implement arrangements for family involvement and revenue participation. They also
allow for asset protection and tax efficiency of wealth transfers.
Both succession planning and ownership structuring are ideally embedded in a
governance framework that covers family communication and decision-making, the
business, and wealth ownership.
2. GENERATIONAL OWNERSHIP
3. FAMILY DYNAMICS
Family-owned businesses have to balance the needs and goals of the business and
the family, which can be difficult when personal and professional relationships
overlap. Here communication is the challenge and the solution.
It's crucial for family businesses to establish clear roles and responsibilities for each
family member and to have regular meetings to discuss and resolve any issues that
may arise.
Again, family governance can enable communication, prevent and manage conflicts
and ensure regulated decision-making.

4. Business families should tackle the above
challenges to improve their business's long-
term stability and competitiveness by
balancing their family, business, and
ownership responsibilities.
In most scenarios, a sound governance framework and ownership structuring lay
the foundation for effective communication, wealth preservation, and business
success.
Contact Centro LAW law to learn more about family business ownership structure
and governance frameworks.
www.centrolaw.ch
Centro Law
CONCLUSION
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