The Pros and Cons of Working for a Small or Medium-Sized Family Business | Part II

Written by: Maria Shishkova Managing Partner, AIMS Bulgaria

“All happy families are alike; each unhappy family is unhappy in its own way.”

This well-known opening line from Anna Karenina by Leo Tolstoy can also apply to family-owned businesses. Their advantages often present themselves in similar ways: trust, stability, and a close-knit culture. But when things go wrong, the reasons are unique – sometimes surprisingly personal, other times deeply systemic.

Before turning our attention to the challenges, it's worth highlighting another often-overlooked benefit:

Higher level of protection

In times of economic turbulence and uncertainty, employees in family businesses often enjoy a higher level of security. Layoff decisions are not made automatically based on KPIs but are frequently guided by a logic reminiscent of familial care: putting people first. In such companies, employees are more than just names in a spreadsheet – they are “our people”, individuals with stories and contributions.

However, this protection comes with a risk: it can create an environment that lacks a sense of market reality. When someone spends too long “under the umbrella,” they may forget what it truly means. In extreme cases, this leads to tolerating underperforming employees or to inertia at times when change and adaptation are necessary.

Disadvantages of working in a family business

1. Limited resources and corporate perks

Small and medium-sized family companies often operate with tight budgets, which impacts what they can offer employees. You’ll rarely find five-star teambuilding retreats, wellness budgets, frequent international training, or coaching and mentoring programs. If you're used to the resources and scale of a large corporation, transitioning to this kind of environment may be challenging. 

2. Internal relations and feeling of favouritism

Family dynamics inevitably influence business decisions. Appointments, promotions, or strategic decisions may at times be driven by personal closeness rather than objective criteria. This can create a sense of an “invisible ceiling” among non-family employees – no matter how strong their results, key positions may remain “in the family”.

3. Wide range of responsibilities and workload

In a team of ten, there’s little room for specialization, and roles are often broad. For ambitious and capable professionals, this can be an opportunity for rapid development and cross-functional experience. But for others – especially those seeking clearly defined roles and firm boundaries between work and personal time – this may lead to overwork and emotional exhaustion.

4. Personal conflicts spilling into the workplace

Family disputes don’t always stay at the office door. Even minor disagreements between relatives can block important decisions, create tension, or undermine the authority of the leadership team. Non-family employees often find themselves caught in the middle of unresolved tensions, without the power to influence outcomes or clarity about the direction of the organization.

5. Resistance to change and lack of innovation

Tradition is one of the greatest strengths of family businesses – but also one of their biggest limitations. “We’ve always done it this way.” This phrase may sound harmless until it starts stifling innovation. The desire to “keep the founder’s spirit” can slow down the adoption of new technologies, processes, or management practices. Digitalization, automation, and market expansion are often left waiting for the approval of the third generation – still unsure of their value.

6. Lack of modern business culture

Many family businesses lack structured systems for talent management, training, performance evaluation, or strategic planning. Management is often based on intuition, experience, and “gut feeling” rather than structures and standards. This can result in inconsistent quality, process delays, or a lack of transparency – factors that may hinder both new employees and the company's long-term growth.

Is a family business right for you?

Choosing to work for a family business depends on your professional expectations, personal values, and flexibility. If you value hands-on learning, close working relationships, and a human-cantered approach, this environment can offer a fulfilling and engaging career. But if you need structured processes, a clear hierarchy, and opportunities for growth within a large-scale ecosystem – perhaps a bigger organization may be a more suitable platform for your development. 

This article is Part II of our series, "The Pros and Cons of Working for a Small or Medium-Sized Family Business." To read Part I, which covers the advantages, please visit: The Pros and Cons of Working for a Small or Medium-Sized Family Business | Part I