As we all know, a family business is a specific kind of organization, but they could also be an LLC or a joint stock company. Yet, from the perspective of conducting the due diligence, I guess it clouds the image when we include the family characteristic, history, etc. For instance, when discussing the DD with the founder or another essential family company member, they could not grasp its significance or the expense; therefore, it is crucial for lawyers and financial professionals to explain it to them.Thus, we need to patient and mindful of this underlying feature known as family pride, prestigious…etc things you can’t measure or caught in the DD. In middle eastern environments even seniors who departed the firm might have a say so in creating the DD. So, basically what it is the DD in the paper mightn’t reflect the reality of the family business son the ground.
As a result, we must be patient and conscious of this underlying characteristic known as family pride, prestige, etc., characteristics you can’t measure or caught in the DD. Even senior employees who left the company could have a say in the DD in middle eastern cultures. Thus, the Information in the paper could not accurately represent the family business’s reality on the ground.
I think one of the key difficulty is that if the family business is small, they do not keep good records of operation and finance. So the reliability of accounts may be an issue. Another key issue I can think of is that many family members may hold key positions in the company and after taking over it may post challenges as well if you want to professionalize the operation with external managers.