Addiction Often Behind Failing Family Businesses

Addiction Often Behind Failing Family Businesses

woman doing bills at restaurant

Running a family owned business takes a lot of hard work. In fact, most family businesses are not able to keep their doors open longer than five years and only 33 percent of those companies survive long enough to be passed down to the next generation. There are many factors that decrease the chances of a successful family business, including poor management and financial needs. But underneath the obvious reasons for difficulties is something just as detrimental: addiction.


A 2012 study that researched 99 family businesses found that over half faced difficulties as a result of a family member struggling with addiction. Is there a higher risk of addiction for those who work for or own a family business? According to the results of the study the answer is yes.

What are the factors that make addiction a large part of family businesses? The researchers list pressures to be successful, home instability due to children lacking quality time with their parents and little work repercussions by addicts that believe since they’re family they cannot be fired.

How can family members protect their relatives and their business from addiction? Experts suggest watching for signs that a person is abusing drugs or drinking too much, such as:

  • Being frequently late or absent
  • Lack of motivation
  • Decreased productivity
  • Accidents, injuries or legal troubles
  • Poor work quality, complaints from customers
  • Conflicts with family members and co-workers
  • Unexplainable financial problems
  • Stealing or frequent borrowing
  • Lack of confidence
  • Deteriorating personal appearance/hygiene
  • Depression
  • High and low mood changes

It’s important that family members intervene if they feel a loved one is struggling with addiction, even more so if they are all a part of a business that is supplying their income. Family members should approach their loved one with a positive attitude, share their concerns and offer to help in whatever means necessary.

When there is addiction inside a family business it can threaten the stability of both the family and the business, so it’s important for the addiction issue to be confronted. Families should seek help, whether through Alcoholics Anonymous, Al-Anon, therapy or a rehabilitation facility.

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