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•Read the article below about family businesses and the questions.
•For each question (13-18), mark one letter (A, B, C, or D) on your Answer Sheet.
FAMILY BUSINESSES
A great many people maybe at some stage in their lives consider setting up a business with their family members. The idea may seem very attractive, but the reality of working with someone close to you can often cause unforeseen problems. 80% of family-run businesses think that when times get tough, love, romance or family bonds will see them through. But the fact is that although 70% of businesses are family-run, only 40% of these companies survive to the second generation.
Why do so many family businesses fail? While money has traditionally been thought to be the root of all difficulties, the major problem is much more clear. In businesses which don't have family ties or relationships, people find it easier to communicate and to say what is on their minD.In contrast, with family businesses, people often make the mistake of thinking they know what views other family members have without actually discussing with them.
There is one strategy which should be used in all family businesses to protect potential problems. As time goes by, one partner may lose interest or not work as effectively as they are expected to. If each partner's responsibilities are identified from the start so that they know exactly what is required of them, difficulties are less likely to arise as the business develops. It is also recommended to ask yourselves a few 'what if' questions before starting a family business. For example, what if one of the partners brought a friend into the family business and others didn't like this person? What would you do? To avoid this kind of problem, you should talk it over amongst yourselves. This sort of research can make you aware of both your own attitudes and the attitudes of the other members of the family before problems actually occur.
Contracts are another potential problems. Too many family businesses are run on the most informal terms. People often think it is unfriendly to ask a relative to sign a contract outlining the terms of a business venturE.But you should treat the family business like any other business and be professional to draw up a contract. Whether the business is profitable or not, it is supposed who owns the shares must be clearly defined and written into a formal contract. It must also be clear who is running the company. Some family businesses take a vote on every decision. Perhaps this exercise in democracy should be applauded, but it created so many complications that in the end the business faileD.Even a small committee can sometimes be too largE.In matters affecting the entire company. only one of you should be the decision-maker. He or she doesn't have to be the largest shareholder, but should be the one best able to lead the business.
Another type of problem arises when a relative decides to join an already established business. In these cases, you should do everything you can to avoid favourism. It is important to avoid putting him straight into any kind of managerial position. Instead, encourage him to learn not only the company but the people who make it work by working on the shop floor on the assembly linE.They have to prove to be a valuable asset not to the family but to the business.
Why do many people find it appealing to start a family business?
A.Because there would be abundant capital for operation.
B.Because family bonds are helpful in overcoming difficulties.
C.Because they hope to survive for generations.
D.Because they can make profits without unforeseen problems.