Familiarly Sustainable Companies

In the case of the country, while family businesses are a **key driver of the Mexican economy, **their permanence is at risk, since half may not survive, according to a study by the Center for Research for Business Families.

The center itself detects that family problems can put 50% of Mexican companies at risk of disappearing. The accumulation of bad practices can lead family businesses to disintegrate or generate the failure of the company. Only 4% of the families analyzed show healthy development. While factors such as role confusion, unprofessional wealth management, and lack of conflict resolution undermine their long-term viability.

Challenges of Family Businesses

The study indicates that one of the biggest challenges is achieving successful generational transitions, since only 9% have reached a third generation.

This term does not apply to those companies that have a single owner and administrator. In fact**, family businesses are the oldest type of economic organization. **Many of the large companies listed on the respective stock exchanges of the countries are family-owned.

Specialists recommend that in the Boards of Directors of these companies there are advisors with three different profiles:

- Non-administering family members.

- Non-family administrators.

- Family members who participate in administration.

For a family business in Mexico not to go bankrupt, it is crucial to define clear roles and functions, establish a culture of commitment and transparency, and plan generational succession in advance. It is also important to maintain effective communication between all members, both family and employees. As well as adapting the company to new technologies and market trends.

Family businesses have advantages such as great flexibility, dynamism, a well-defined culture and common objectives that, if well used, can boost the growth of a small business. However, for the advisor KPMG Mexico, they also have significant challenges that make their survival difficult in the medium and long term, such as:

- Dependence on the founder.

- Lack of access to funding sources.

- Exceeding the business's capabilities.

- Lack of clarity of functions.

- Giving priority to family members.

- Lack of an orderly succession.