Tips from the Top - May 2014
Family Business Best Practices
I recently facilitated a meeting of five business owners, all of whom lead a business with other family members involved. They were gathered to share best (and worst) practices based on their own experiences. The discussion focused on bringing the next generation into the business, and preparing them to take the helm. Here are the most significant truths that emerged…Read more
Failure to Hold Family Member Employees Accountable
Our Board has members that are both owners of a family business and non-family key decision makers of family businesses. Thus, our discussions often turn toward the problems of siblings and heirs apparent who appear to be held to different standards than others in the firm with similar job responsibilities. Our discussions almost always lead to the same advice for members…Read more
Is Joining the Family Business Right for You?
My experience with a number of family businesses has led me to believe that it takes a very special parent-child relationship to achieve success. If you’re thinking of joining your parent’s business, there are some important questions to ask yourself before making a decision…Read more
Planning for the Inevitable
This isn’t a fun topic, but if you were hit by a bus tomorrow what would happen? How would you take care of your family and your employees? What would your spouse/partner/family want to happen with the business? Would they want to sell it, run it? Would other family members run it? Would they have to sell your business at a bargain basement price due to the fact that you aren’t there to manage the business? Define it now and document it so that if something should happen to you it is clear what will happen to your business. Your family and loved ones will be under enough stress without having to worry about what happens with the business.
Separating Work and Personal Time
As a business owner, I often struggle to separate personal time and work time, especially since I have family in the business. A simple way to signal to my brain that work is over and it is time to relax is to change clothes when I arrive home. Before, when I kept my business clothes on in the evenings, there was never a mental break from the business day. This doesn’t mean that business issues never come up in the evenings, but my state of mind while in my “play” clothes reminds me that these evening interruptions are the exception and not the rule. This has allowed me to more easily disengage from the business and better enjoy time with my family.
Generation Gap in Transition Planning
When selling your business to the next generation of family, key questions to ask yourself are “Do we want to sell the business to the next generation more than they want to buy it?” and “Is the next generation willing to put in the effort that we had to in order to sustain and grow the business?”
Mixing Business and Family
I am considering bringing my daughter into the company. Although she is trained as a teacher, she has been out of work and we need additional help. She knows the company, is suited to the job, and could well be part of my succession plan. The Board gave me some excellent pieces of advice. Don’t bring her in with a vague mandate. Write a complete job description, and ask if this is a position she wants. Don’t address the succession issue now, or ever, unless she brings it up. Relieve pressure on both of you by telling her, “You want a job and I need an employee. Unless you decide you want to make this your career, we will proceed with that as the working arrangement. The subject of ownership is open anytime you wish to discuss it, but you’ll need to approach me and bring it up.”