The project is co-funded by EU through the Interreg-IPA CBC Bulgaria–Serbia Programme.
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12.05.2020 13:39

Problems of family entrepreneurship

As pointed out, a family business refers to the pursuit of an activity by family members who have developed or inherited it. Some characteristics of entrepreneurs may be hereditary or they can be developed in the appropriate context of an entrepreneurial family, but it happens that potential business heirs do not have the same desires and ambitions as their predecessors. In this sense, the absence of an “entrepreneurial spirit” and the pursuit of continuing family business can contribute to the decline of the entrepreneurial venture. In addition, the following can be identified as family business problems: • the problem of securing additional capital - most often the start-up capital, but not infrequently, and the capital needed to expand the business is very difficult to secure when it comes to family entrepreneurship, • the impact of emotions on work - can often lead to unprofessionalism and improvisation, especially if emotional intelligence is not high enough, • transfer of ownership and business to heirs - different affinities or generational gaps can threaten the succession of the family business, • family rivalry - personal conflicts that arise due to the lack of a clear boundary between the rights and responsibilities of individual family members, • nepotism - sometimes the advancement of employees who are not family members is threatened or hindered by unjust or undeserved advancement of family members, • Remuneration of family members and other employees of the company - similar to the previous, the privilege of family members can be noticed by other employees, which will have a certain negative impact on their motivation and commitment, • Lack of narrow expertise - which is why the professionalisation of managing a family business is not infrequently needed, that is, hiring experts to replace this shortcoming, • high risk of doing business - as a family business is usually the sole source of income for the whole family, in the event of bankruptcy, the business may endanger the survival of the family.