When Love Meets Liability: Why Family Businesses Fail (and How to Stop It)

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đŸ§± Series: Bloodlines and Bottom Lines – The Untold Stories of Family Business

Have you ever seen two aunties fighting over who gets their mother’s Nasi Lemak recipe? Now imagine that same dynamic
 but it involves property, millions of dollars, and 20 years of blood, sweat, and unspoken expectations. (p/s: if you are in Singapore, you will see there are many hawker families that split because of the recipes and this CNA’s series documented it very well – food feuds)

Welcome to family business.

In Part 1, we met the Tan brothers—five siblings who built something special together, only to see it unravel when unspoken promises clashed with legal reality. But the Tan story? It’s not an outlier. It’s a pattern.

So why does this keep happening?

Let’s peel back the curtain on the quiet chaos behind many family-run businesses in Singapore—and more importantly, what you can do before it’s too late.

🧹 Reason 1: “We’re family. No need to write anything down.”

Sound familiar?

It’s the most common refrain I hear when advising family enterprises. There’s this deep cultural reflex—especially in Asian households—that says formalising agreements means you don’t trust each other.

But trust isn’t about handshakes. Trust is about clarity.

Let’s say Ah Seng promises his younger sister Mei Li that she’ll get 20% of the business “next time.” Everyone nods. Fast forward 15 years. “Next time” never came. And suddenly, Mei Li is scrolling through ACRA with a glass of wine and a rising sense of betrayal.

If it’s not written down, it never happened. Period.

đŸ’„ Reason 2: Mixing roles and relationships

In theory: your eldest son handles the books, your second-born runs operations, and your daughter helps “when she’s free.”

In reality? You’ve got overlapping responsibilities, zero accountability, and someone’s spouse complaining over dinner about “carrying the whole business.”

Here’s the deal—just because someone is family doesn’t mean they’re qualified. And just because someone is qualified doesn’t mean they want to take over.

Clear roles, job descriptions, and performance reviews aren’t just for MNCs. They protect relationships. They prevent sibling rivalries from turning into full-blown shareholder wars.

đŸȘ€ Reason 3: The Next Gen isn’t ready. Or worse, they don’t want it.

You’ve probably heard this saying:

First generation builds it. Second generation grows it. Third generation blows it.

Harsh, but there’s truth in it.

Many founders work 16-hour days to build something meaningful
 but forget to build foundations for succession. So when it’s time to pass the baton, they realise no one’s been trained, no one wants the stress, or worse—everyone wants control, but no one wants responsibility.

If you’ve never had a proper family business meeting about succession, expectations, and vision
 it’s not too late. But you’ve got to start before it becomes a fight over your hospital bed.

📉 Reason 4: Money makes things weird.

Let’s be real. We don’t like talking about money in most Asian families. It’s “not nice,” “disrespectful,” or “later then discuss.”

But money is the bloodstream of a business. If your brothers don’t know who actually owns the shoplot, or your kids think “everything is 50/50” because you love them equally
 you’re sitting on a landmine.

Transparent communication about ownership, dividends, salary, and reinvestment isn’t greedy—it’s governance. And it keeps Christmas dinner drama-free.

📈 Reason 5: There’s no plan
 just vibes.

Far too many family businesses run on vibes, not vision. Everyone’s “just trying their best.” But there’s no roadmap. No strategy. No emergency plan if dad falls sick or the market tanks.

Sound familiar?

Without clarity, emotions fill the void. And once egos enter the chat, it’s very hard to walk it back.

So, What Can You Do?

  1. Start talking. Set up regular, structured family business meetings. Not every dinner needs to turn into a boardroom
 but some should.
  2. Get it in writing. Use shareholder agreements, employment contracts, and wills. It’s not a lack of trust—it’s a sign of respect.
  3. Bring in help. Whether it’s a family business coach, a lawyer, or your accountant—external professionals can ask the awkward questions and create safe boundaries.
  4. Respect the boundary between family and business. One is built on love. The other runs on structure.

🎯 Quick Self-Check: Are You Running a Business or a legacy Time Bomb?

☐ Do you have clear written agreements about ownership and roles?
☐ Have you had an open conversation about succession?
☐ Are family members being paid fairly and transparently?
☐ Do you have a mechanism to resolve disputes (that’s not “see you in court”)?
☐ Is everyone clear on your vision for the future?

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