Challenges to Overcome to Grow Family Business

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to manage the company. Therefore, Eu Yan Sang should have a proper business plan that states that company’s long term goals and objectives. Next, the management shall incorporate these objectives when they design the company’s strategy. In addition, at the preliminary stage, the firm’s strengths and weaknesses need to be evaluated while factors that make up the firm’s internal environment such as resources have to be analysed to assess the firm’s competitiveness in the industry. At last, they will come to a consensus on the firm’s goals and objectives with a strategy in place monitored by the board of directors.

• Compensation problems for family members: Compensation problems may arise especially for family members in a family business. This is contributed by unclear wage levels and welfare benefits that each of them are entitled to. Hence, Eu Yan Sang should conduct a staff appraisal annually and rank them according to their performance. They will then be rewarded based on their achievements and performance level. In addition, the company should also recruit external advisors to assess the remuneration package for the employees.

• Lack of Talent: In a family business, there is a high possibility of lack of talent and this often occurs when family members who do not have the experience join the company or even become part of the management. It is also tough to fire them if their performances are below par. Hence, the company should make it compulsory for them to have the necessary experience and skills before joining them. These skills will prove to be useful and critical in the growth of the firm in the long term. Furthermore, it is necessary to have a well balanced team with people equipped with different skills and knowledge. Channel NewsAsia. (2016). Eu Yan Sang also need to hold on to other employees and prevent them from leaving the company as they can provide important views to improve the company.

• High Turnover of non family members: High turnover of non family members in a company will occur when employees do not see opportunities for them to be promoted or take on new roles. This causes them to be unmotivated and cause them to search for better job opportunities in other firms. This causes the company to lose talents and employees who can steer the business to greater heights. Hence, the company should assure its staffs and offer them more incentives and make them feel secure about their own job. Also, the management should delegate more jobs and power to the employees to make them feel important and acknowledging their hard work by rewarding them.

• Succession Planning: Succession planning is vital to any company as people tend to neglect the importance of proper handing over of business to the future generation. Hence, it forms more anxiety among employees as the situation is ambiguous. Again, it can cause employees to lose motivation as they are concerned with job security. Epstein, M. (2003). Therefore, it is recommended that a succession plan must be formed and it should align with the company’s vision and goals. This is attainable with the aid of professional advisors and the plan must be communicated to the family members so that they are aware of it.

• Retirement and Estate Planning: Retirement and estate planning are equally important to Eu Yan Sang. Retirement planning is to cope with the situation when older employees retire and they have to be compensated equally. Alderson, K. (2011). On the other hand, estate planning is to effectively transfer ownership of the estate to the heirs. It is to prevent conflicts from arising.

Conclusion

In conclusion, through this essay, it is evident that there are many challenges in running a family business. Some of these challenges include compensation issues, high turnover rates among non family employees as well as lack of strategy and direction of the company. Hence, it is important for family members to be united and communicate more to resolve some of these internal and external issues that could affect the business in the long term.

References

Evans, L. (2013). How to Manage the Challenges of a Family Business. [online] Entrepreneur. Available at: https://www.entrepreneur.com/article/225916

Euyansang.com.sg. (2016). Eu Yan Sang | About Us - EuYanSang.com. [online] Available at: https://www.euyansang.com.sg/about-us/eyscorporate1.html

Channel NewsAsia. (2016). Family businesses face challenges in attracting and retaining talent: Survey. [online] Available at: http://www.channelnewsasia.com/news/business/singapore/family-businesses-face/2444156.html

Bernard, C. (2012). The benefits and challenges of the family business component [Part 1]. [online] Kpmgfamilybusiness.com. Available at: http://www.kpmgfamilybusiness.com/the-benefits-and-challenges-of-the-family-business-component-part-1/

Deutsch, M., Coleman, P. and Marcus, E. (2006). The handbook of conflict resolution. San Francisco, CA: Jossey-Bass.

Epstein, M. (2003). Family business. Göttingen: Steidl.

Alderson, K. (2011). Understanding the family business. [New York, N.Y.] (222 East 46th Street, New York, NY 10017): Business Expert Press.

Poutziouris, P., Smyrnios, K. and Klein, S. (2006). Handbook of research on family business. Cheltenham, UK: Edward

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