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The #1 Mistake Family Businesses Make (And How to Avoid It)

Introduction

Let’s be blunt: running a family business is no joke. You’re juggling personal relationships and professional expectations — and if you’re not careful, one common mistake will take the whole thing down.

I see it all the time. Businesses with heart, hustle, and history… sabotaged by this one thing. Let’s talk about what it is, why it matters, and how to fix it.

Quick Answer:
The #1 mistake family businesses make is avoiding difficult conversations. When issues aren’t addressed, trust erodes, productivity stalls, and relationships deteriorate — both at work and at home.

communication in family businesses

The #1 Mistake: Avoiding Difficult Conversations

Yep. That’s the killer. Family-run businesses often avoid uncomfortable conversations because no one wants to upset Mom, piss off Uncle Joe, or spark World War III at Sunday dinner.

So what happens instead? Problems get swept under the rug. Accountability disappears. Resentment builds. And the business suffers.

According to the Harvard Business Review, the most successful family businesses are those that foster a culture of open, honest communication.

Why It’s So Dangerous

  • It kills trust. When issues aren’t addressed, people stop believing in fairness and leadership.
  • It ruins productivity. Everyone wastes energy managing emotions instead of solving problems.
  • It damages relationships. The longer stuff festers, the uglier it gets — inside and outside the business.

Real Talk: What Avoidance Looks Like

  • You don’t tell your cousin he’s underperforming because you “don’t want to be mean.”
  • You let your sister dominate meetings even though her ideas aren’t always aligned.
  • You hold back feedback, afraid it’ll ruin the family dynamic.

Sound familiar? Yeah. You’re not alone.

I once worked with a family-run construction business where the founder avoided giving feedback to his daughter — even though her poor communication was driving employees away. It wasn’t until the business lost a major client that he admitted the problem. Through coaching, they built new communication habits, and within three months, retention and morale improved dramatically.

What You’ll Learn in This Post

  • How avoidance hurts both the business and the relationships
  • Simple, practical strategies to start tough conversations
  • The power of coaching for family-run business dynamics

leadership in family-owned companies

How to Fix It

1. Create a Communication Policy

Lay out how — and when — to have tough conversations. Make it a routine, not a reaction. Put it in writing. Define who gives feedback, how it’s handled, and when it’s expected.

2. Use Neutral Language

Don’t blame. Don’t shame. Use statements like “I’ve noticed…” and “I need…” instead of “You always…” This shifts the conversation from personal attack to productive dialogue.

3. Bring in a Coach or Mediator

When it’s too hot to handle internally, call in someone who’s not emotionally involved. A coach (like me) can guide the process, create structure, and help the team stay focused on goals — not grudges.

4. Schedule Conflict Check-Ins

Avoidance thrives in silence. Set up monthly meetings where family members can voice concerns — no judgment, just solutions.

Final Thoughts

Avoidance doesn’t protect your family — it sabotages your business. And here’s the truth: the longer you avoid hard conversations, the more damage you do.

The most successful family businesses I work with? They don’t wait. They face the tough stuff head-on — with support, structure, and clarity.

Want support navigating the conversations no one wants to have? Learn more about how I help family businesses communicate and thrive.

Also check out How to Set Boundaries in a Family-Run Business for tips on separating family from function.

Frequently Asked Questions

Why do family businesses avoid hard conversations?
Because emotional baggage gets in the way. People fear disrupting the family dynamic — even if it’s already toxic.

What’s the best way to bring up difficult topics?
With a plan. Use neutral language, focus on facts, and suggest solutions — not just complaints.

Can a coach really help with internal family issues?
Yes. A neutral third-party helps remove emotional bias, keep the conversation productive, and support lasting changes.

🚀 Want a Real, Experienced Coach? Let’s Talk.

If you’re ready to take control of your life and start making meaningful changes, here are a few ways to begin:

Let’s talk! Book a free consultation to see if coaching is right for you.

Want to learn more about coaching? Check out my latest blog posts for insights and tips.

Explore and Discover Resources to help along your journey.

About Jillian Smith

Disclaimer: Jillian is not a therapist or counselor. She offers life coaching to help you unlock your potential and achieve your goals, business coaching for professionals and family-run businesses seeking success, and relationship coaching to build strong, meaningful connections.

As a grief coach and Death Doula, she provides compassionate support and practical steps to help you navigate loss, guiding you through life’s toughest transitions and helping you create meaning after them. Jillian graduated with honors in both undergraduate and graduate school and is dedicated to helping you thrive while maintaining balance and well-being.

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Disclaimer

As a life coach, I provide services to help people reach their ultimate potential. I am not a licensed therapist or counselor. I don’t assess, diagnose, or treat mental, emotional, or behavioral disorders. I don’t apply mental health counseling or other psychotherapeutic principles and methods in my work. Instead, I focus on helping people get from where they are to where they want to be.


I am not a licensed psychologist in Oregon, I don’t practice psychology as that is defined under Oregon law and I don’t represent myself to be a psychologist.” In addition, my coaching services are not professional counseling services, as defined by Oregon law. I don’t represent myself to be a licensed professional counselor. Nothing on my website, in my marketing materials, in client appointments, or in communications with anyone is meant to say that I provide services for which Oregon requires a license.


Neither of these licenses is necessary for me to provide my clients with the tools to become who they want to be. If I believe it is appropriate for you to see a licensed psychologist or counselor, to supplement our work, I will make a referral.

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