Financial management in family businesses: challenges and strategies for sustainability

A substantial share of businesses globally are structured around family ownership and management. History is filled with remarkable success stories of family businesses, making it a subject that continues to attract the interest of researchers. Because of family involvement, the goals and objectives of a family business often differ significantly from the firm-value maximization goal typically associated with publicly traded and professionally managed non-family firms. Identifying the key financial challenges for family businesses is a very complex issue. This paper aims to address these issues. Financial sophistication is increasingly becoming a necessity. The research team selected a set of 70 family businesses that operate in the Republic of Serbia. The author captured the relevant information for this research by sending out a survey to each family member and each non-family director or executive. Key challenges in financial management within family businesses have been identified.