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Considerations for Family Businesses

A Family business can range from a small mom and pop business to large multi-million dollar publicly traded companies. Family businesses and their leaders often experience many of the common problems of a regular business, but also have an added layer of problems and dilemmas related to unique family issues. An effective way to deal with these issues is the use of a team of qualified family business advisors.

Family businesses are unique in that they must consider a balance between three different systems that exist. The first system is the business system. The second system is the ownership or governance system. The third system is the family system. Each family member could be included in one, two or all three of these systems. The goals of each of these systems may be very far apart. Each family business is unique and may require the help of family business advisors to help sort through the difficult family, business and governance issues. Sometimes a third-party point of view and objective guidance is helpful to the family in assessing and understanding the relationship a family has with its business.

Choosing a qualified team of family business advisors with various multidisciplinary backgrounds will provide an objective and third party approach to helping the family, the business and its owners achieve their collective goals. The family business advisory team can be the “fall guy” for the difficult decisions that sometimes must be made by certain members of a family business. They can help the family business manage the process of change. Family business consultants work at the boundaries where there are overlaps between the three family business systems. For instance, they can help family business members decide whether they should treat on another as family members or employees. They can help with succession plans to ensure the needs of the family, the business and the shareholders are considered. They can also work with the family to make sure there is proper family representation on the board and that the board runs effectively.

Source: Conover, Lynn A., June 6, 2017, http://www.curchin.com/considerations-family-businesses/

 



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Considerations for Family Businesses

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