As we saw in the 3 circle model how a family business is made up of 3 dimensions namely: family, business and ownership. But when we add the concept of time to these dimensions we can see the various through which these dimensions progress and how they " create forces for and/or against the family business as a whole as well as individual dimensions.
Ownership: The first stage is the owner-controlled/ owner-managed stage where the ownership and management are in the hands of a single member of the family and she/he takes all the decision s in the business. As the business grows complex and other members join the business, it can progress to the next stage of partnerships. This helps in effective management of complex business activities along with shared risk but also may result in dilution of ownership share and may lead to conflicts between partners.
Business: A business goes through various stages as it proceeds ahead in the timeline. the 1st stage is start-up, when the business is launched and it tries to enter the market, capture customers and build a name for itself in the markets. The next stage is the expansion stage where the business goes through a lot of changes and should tread carefully as it shapes the business dynamics for the long run. The next stage, depending on how the business performs is that of maturity/decline. At this stage the business needs to think of new ideas to avoid becoming stagnant and eventually leading to decline.
Family: In the first stage, the parents have to manage both the business and the family by themselves and nurture the younger generation. As the younger generation grows older and come to an age where they are ready to enter the business, the previous generations are concerned with creating the rtight path for them and making them realise their responsibilities. The next stage of working together is where tensions arise as people may have different opinions and not work in she same direction. This has tio be dealt with collectively by the family. The next stage is that of passing on to the younger generations and letting them manage the business on their own and let them take full responsibility.
when we look at where a particular family business stands in every dimension and combine them, it becomes easy to comprehend the challenges and opportunities the family business has.