Why Family Business Fail

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It is to a larger extent true that most family owned businesses die with their owners. A family business can be defined as a profit-making organisation characterised by a synthesis of ownership and control by the members of the same family. Some research statistics that have been gathered over the years are evidence to this statement. Family businesses that are established in most cases fail to survive and grow after the death of the company founder and owner. The following information shows why a lot of family-owned businesses fail to continue after the death of the founding owner: Lack of expertise. A family business may fail to survive and grow after the death of the owner because the remaining family members would be lacking the necessary expertise and experience needed to continue running the business. For instance, an Accountancy firm may close after the death of the owner who was an expert in accountancy because there is no one left in the family who is also an expert in the field of accountancy. Thus, most of the firms which are established by family members who are experts in a certain field are likely to close down once the family member is dead. Absence of a sound succession plan. Most family owned businesses fail to continue upon the death of the founding family member because there would be no succession plan in place that would be implemented upon the death of the owner. The absence of family business succession plans can be attributed to culture particulary in the African society. Africans shun talking about death and are very superstitious about the subject as they believe that talking about death may lead to someone’s early death, this is also particulary true in Zimbabwe. Thus, succession plans regarding someone’s death are never discussedand this may ultimately lead to closure of the business upon the death of the owner since there would be no

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