Most people think that family businesses struggle because of lack of profits, competition, or market changes.
But the real reason many of them break down?
It’s what happens inside the family.
Not at the market.
Not in the economy.
Inside the house.
Inside the boardroom.
Some Hard Truths:
📉 70% of family businesses don’t make it to the second generation
📉 Only 13% make it to the third
📉 Just 3% survive till the fourth generation
These aren’t just statistics. These are stories. Stories of trust lost. Of decisions delayed. Of roles confused. Of egos clashing.
As someone who comes from a 4th-generation business family that started in 1894, I’ve seen these stories unfold up close. Some made it through. Many didn’t.
And I’ve realised something important:
Family is your strength — but only when business is managed with structure, clarity, and trust.
What Actually Breaks Family Businesses?
It’s usually not money. It’s not customers.
It’s things like:
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Father and son not seeing eye to eye
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Siblings feeling unequal
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One family member is doing all the work, and others are watching
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Succession is being delayed because the founder isn’t ready to let go
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The younger generation wanting change, but being blocked
Mixing business decisions with personal emotions
Experience vs. Adaptability
Many family businesses in Kerala or the Gulf face this classic issue:
The older generation says: “We built this. We know best.”
The younger one says: “The world has changed. Let us try.”
Who’s right? Both.
Who’s wrong? Neither.
But without honest conversations, shared vision, and clear roles, the business becomes stuck — or slowly falls apart.
What Can Be Done?
Here’s the truth:
Every family business goes through these stages.
It’s not about avoiding conflict. It’s about managing it early.
It’s not about control. It’s about clarity.
It’s not about who’s right. It’s about what’s best for the business and the family.
And these things don’t happen naturally.
They need intentional planning, structure, and emotional maturity.
Final Thought
If you’re running a family business — or are part of one — pause and ask:
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Are our roles clear?
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Do we have a plan for transition?
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Is everyone feeling heard?
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Are we growing — or just surviving?
Because no family business fails overnight.
It fails slowly — through silence, stress, and assumptions.
- And it doesn’t have to be that way.
Case study references
Transgenerational Succession in Business Groups in India”
Appearing in the Asia Pacific Journal of Management, this article discusses succession patterns and challenges across generations in Indian business families. Challenges in the Succession Process: The Case of Indian Family Businesses in the United Arab Emirates” This study from the Middle East Journal of Management focuses on succession dynamics among Indian family businesses operating in the UAE. “Indian Family Businesses: Few Clear on Succession, Why Others Need to Worry?” An opinion piece in The Financial Express highlighting the lack of formal succession planning in Indian family businesses and its implications. Succession Issues in Family-Run Companies: How to Deal with Them Published in the Bombay Chartered Accountant Journal, this article discusses cultural and structural challenges in succession planning within Indian family firms.
