Challenges facing family owned SMES In Bloemfontein

Family businesses are important drivers of the economy. They are important tools in promoting employment, equal share and access to the same share of a country's national income, economic stability, and the overall stimulation of economic development. However, the majority of these businesses do not survive to the third generation of the family. Considering their role in the economy, it is important to investigate the underlying challenges that threaten their existence. Their failure rate portrays a bleak picture of the SME sector's potential to contribute meaning full to the economy, improving standards of living and eradicating poverty. The core motivation of the study was to identify challenges facing family owned SMEs in Bloemfontein. This objective was supported by the secondary objectives. These secondary objectives sought to understand the unique complex nature of family businesses. They seek to analyse the benefits of family owned businesses and their contribution to the economy. The objectives of this study also aimed to analyse the negative impact the family owned businesses have on the economy. The research also looked at how the identified challenged can be overcome to mitigate their negative impacts. To effectively conduct the study and achieve the set objectives, the qualitative approach was employed. The study targeted 12 participants from family businesses with different organisational structures. The study used purposive sampling and semi-structured interviews were carried out to collect data from the participants. The study findings revealed that family businesses have their own unique set of challenges. This is because they seek to balance family dynamics from various generations while keeping up with undiluted founding members‟ values and entrepreneurial spirit. Therefore, the recommendations highlighted by the study are that family businesses should strive to draw a clearly defined line between the family and the business. This can be achieved by embracing external perspectives and having a board of non-family members. This board will not work as a blood hound, but as a watch dog to ensure order.