your family business survival kit

FAMILY BUSINESSSurvival Kit

Free advice from global experts in family [email protected]

www.insights.org.au+ 61 (7) 3229 7333

Thanks for downloading our Family Business Survival Kit.

It’s designed for anyone involved in the large community of family businesses in our region. From it you will gain answers to many of your burning family business questions, as well as encouragement, confidence, guidance and inspiration.

Insights is a not-for-profit offering online educational resources for families in business, aiming to encourage harmonious conversation, shape the thinking of family businesses, and empower family businesses to create a long lasting legacy.

Kind Regards,

The Insights Team

T +61 (7) 3229 7333E [email protected] www.insights.org.auF facebook.com/familybusinesstoolsL inkedin.com/company/insights--customised-family-business-resources

CONTENTS

Building a 100-year family business ............ 3

10 Questions every family business should be able to answer ............................................. 4

5 Ways to manage conflict in a family business ....................................................... 7

Ten commandments for long-term survival ....................................................... 10

14 Questions to ask yourself as you transition away from a full-time role .......................... 12

Three barriers to success in your family business and tips to overcome them ........ 15

20 Reasons to start a family business ...... 18

Breaking the cycle of family business failure ......................................................... 21

The future of family business (video) ......... 24

The future of my family enterprise - what options are available to business families (video) ........................................... 25

Family Business Survival KitBy Insights.org.au

BUILDING A 100-YEAR FAMILY BUSINESSSuccessfully Transitioning Over a Century (Infographic)

Sustaining a family enterprise across generations requires qualities in action which enable them to respond to challenges that emerge in each generation. These qualities are necessary to maintain an entrepreneurial drive for generations.

How can you build a 100-year family business?1. Respect your legacy and core values.2. Continually adapt, innovate & change.3. Value the development of your human

capital.4. Value the experiences & knowledge of

generations to come.5. Grow through communication &

education.6. Cultivate clear methods of decision-

making or governance.

SourceD. Jaffe, 2013: Good Fortune: Building a Hundred Year Family Enterprise. Wise Counsel Research.

https://businessfamilies.org/read/building-a-100-year-family-business-successfully-transitioning-over-a-century/

Infographic Design BySusanna Vogel, The Entrepreneurs’ Ship



10 Questions Every Family Business Should be Able to AnswerBy David Harland(Article, page 1 of 3)

It’s easy to lose track of the big picture and get bogged down in the daily minutiae of running a family business.

Here are 10 questions every successful family firm should be able to answer about their business.

1. What are our family values and how do they contribute to our business success?

Research shows that family businesses that formalize family values and incorporate them into the business have longer, more successful outcomes.These values offer a competitive strength that non-family competitors cannot duplicate and act as an anchor, allowing families to establish connections across multiple generations.

2. What structures do we have in place to deal with conflicts?

All family businesses experience conflict and differences of opinion are perfectly healthy. However, ongoing disputes can harm business operations and lead to resentment in the family. Businesses that develop effective ways to communicate and create a safe space to air disagreements are more likely to thrive over the long term.

3. What governance systems do we have in place?

Research shows that durable and successful family businesses have strong governance. Clear guidelines set out in family constitutions or codes of conduct are key to effectively managing business operations, dealing with conflicts, and setting the stage for eventual succession. A governance structure should establish business roles and expectations and outline equity and compensation.



4. Do we have clear compensation and equity arrangements?

Compensation in family businesses is a thorny issue since money can be an emotional subject; however, establishing fair wages is important to integrating non-family employees, attracting talent, and promoting business success. Well-defined job descriptions, compensation, and explicit promotion criteria will help ensure that all employees are paid fairly. Many family businesses separate equity in the firm from employee compensation to ensure that all family members share in business profits while fairly paying those who work within the business.

5. What are the greatest challenges facing the business?

Every business faces challenges and it’s important to be able to articulate your top obstacles to success, whether they are competitive, structural, or familial in nature. For many family businesses, succession and the retirement of the current owner remain major challenges.

6. What are the wealth management strategies for family assets?

Business families need the ability to manage the wealth they hold outside the business. A prudent investment strategy can diversify investments to manage risk, provide a source of cash for liquidity events and help increase family wealth. Wealth management is important to the long-term health of the business because it can prevent family members from needing to take money out of the business and offer greater options for retirement.

7. What is our business succession plan?

Succession is one of the biggest hurdles facing family businesses and 80% of family businesses may not survive into the second generation. It’s important to start planning for succession as early as possible to give heirs time to grow into their roles or to start seeking non-family successors.

If you’d like to learn more about succession and how to navigate it gracefully, I strongly encourage you to attend the 2013 Bus Industry Confederation Conference, where I’ll be speaking on the topic. The conference is on Oct 27-30 in Adelaide and promises to be an excellent opportunity to discuss trends in the industry and meet some great people.




8. What are the short and long-term goals for the business?

Every decision you make should add value to your business and take you closer to your goals and it’s important to share your goals with key family members. If your plans include significant growth, then your firm may need to seek infusions of capital without diluting family equity. Durable family firms usually favour steady long-term growth over short-term profits to avoid risking family wealth.

9. Do we have a trusted family business adviser who truly understands our business?

Although it may sound self-serving, I truly believe in the value family business advisors provide their clients and evidence suggests those who work with trusted advisors are more likely to prosper. Advisors can offer insight into persistent problems, arrange financing, assist with restructurings and governance, and establish a succession plan.

10. Do I participate in the family business community and take advantage of resources?

Family businesses share many of the same challenges and actively participating in the community can be a great way to share ideas, tackle problems, improve your work/life balance, and make connections in a supportive, confidential environment. We’re strong supporters of Family Business Australia and encourage our clients to attend FBA family forums and other member events.




Sourcehttp://www.finh.com/newsDetail/?6th-of-September-2013---10-Questions-Every-Family-Business-Should-be-Able-to-Answer-131

5 Ways to manage conflict in a family businessBy David Harland(Article, page 1 of 3)

Conflicts are normal in family firms. Follow these 5 golden rules to keep them from boiling over.

Conflict is a natural part of running a business but when colleagues and employees are also family members, ordinary conflict can take on new dimensions.

Corporations and non-family business have formal barriers to conflict between colleagues; Human Resources departments and the natural separation between work and family make it unlikely that a workplace conflict will have serious repercussions on a firm’s future.

On the other hand, the interconnected nature of family businesses means that family drama, workplace issues and conflicts about the business can more easily become serious problems without special handling.

Many, if not most, family firms lack formal processes and strategies to mediate disputes, making it difficult to prevent inevitable quarrels from developing into ongoing issues.

Here are five rules to help manage conflict in a family business:

Rule 1: Leverage formal governance structures to mitigate conflict

One issue that we have seen arise in many family businesses is that family members may lack a forum for discussing issues in the business. Formal structures like family councils, boards and family forums can offer family members a safe, organised way to bring up issues and negotiate conflict. Formal governance can also help mitigate family and financial issues by separating ownership of the business from its management functions.



Rule 2: Give family members space (and permission) to air grievances

One problem that we frequently see in businesses with a first-generation matriarch or patriarch is that family members may lack a safe way to express their needs and concerns. When people don’t feel listened to or appreciated, seemingly small problems can mushroom into major business and family drama.

To help prevent conflicts, family leaders should actively encourage family members to air concerns constructively and give them the space they need to disagree. Senior leaders should come prepared to listen without judgment and be willing to fairly consider what is being brought up.

Rule 3: Don’t let business bleed into family time (too much)

It’s very challenging to keep from bringing business home, but one way that conflicts turn into family drama is by failing to keep them separate. Family business leaders must set the example by separating business and family time as much as possible.

One way to make this separation possible is by having formal spaces and structured times to discuss business issues. Explicitly making other times no-business zones can help family members relax into their personal roles and get away from work.

Rule 4: Communicate early and often about issues

Many large complications start as small problems that could have been resolved with early intervention. Sometimes, spotting issues early and addressing them through clear communication can be enough to prevent a conflict from developing.

Even when family members see each other regularly in the business, formal family meetings can be a better place to hash out complex issues. Whether it’s at a family retreat or simply at a separate meeting, making a break from daily routine to tackle the big issues can help open lines of communication.

A formal setting can also help ensure that issues are not ignored and that members of the family have the opportunity to make their opinions heard.




Rule 5: Bring in experts to mediate major conflicts

Some issues simply cannot be resolved internally. When family members become entrenched and constructive dialogue isn’t possible, an objective expert who is trained to help resolve conflict can help cut through the emotions and focus on issues. A mediator can also help guide a family through initial conversations all the way to a final resolution.

We have found that many family groups can achieve more in a few hours with an outside expert than they have in years by themselves.

Final thoughts

Many conflicts boil down to age-old family disputes. It’s common to see businesses that mirror family hierarchies. For example, parents might run the company together or a favoured eldest child might serve in an executive role while other children and spouses fill in other management positions. However, these parent-child and family dynamics can make the separation of family and business even more difficult.

Leaders must be able to treat children like employees and managers during business time to help reduce the risk that family dynamics will damage the business culture.

Ultimately, managing family conflicts often comes down to creating better communication skills as a family. While conflict can never be completely avoided, treating it as a normal part of business and developing the skills to handle it can go a long way toward building healthier business and family ties.


Sourcehttp://intheblack.com/articles/2015/10/28/5-ways-to-manage-conflict-in-a-family-business



Ten Commandments for Long-Term SurvivalBy John Connolly(Article, page 1 of 2)



Think about this. Right now about 40 per cent of all family businesses are facing succession issues, half of all family businesses will fail going through that process, and in a new trend family businesses are increasingly run by siblings.

On top of that, while there is some truth in family businesses only lasting three generations, some have lasted more than 1500 years.

But, in good or bad news, depending on your family, as guru John Grant says, “the most critical issues facing business-owning families are family-based issues more than they are business-based issues”.

So here are my Ten Commandments of family businesses.

Don’t get your meat where you get your bread: With a $170 billion market cap, Volkswagen is a reasonably sized family company but the battles between majority shareholders, the Porsche and Piech families, make the automotive giant look like the Beverley Hillbillies. Basically, the two families are both direct descendants of founder Ferry Porsche but the Porsche side stayed at the sports car company and the Piechs went to VW. Things got really bad when Ferdinand Piech had an affair and two children with Marlene Porsche, wife of Gerd Porsche. Earlier this year Piech got the flick as chairman of VW and Wolfgang Porsche and his family look like the winners. This time.

Strategic investments: If someone comes to you seeking to make a strategic investment, substitute the word stupid for strategic and you will be fine. David Crane, the boss of NRG Energy, doesn’t run a family company but he’s right about this.

Appoint a consigliere: When Vito Corleone hit the big time, the first thing he did was to hire Genco Abbandando to help run the family business. Almost every successful family operation has a “consigliere” -- an outsider who shuns publicity -- to keep things on the straight and narrow. Sydney lawyer John Churchill plays that role in some of Australia’s biggest family outfits.

Pay your taxes: Paying tax always sucks -- especially when you are starting out. Neither political party “gets” small business. Both make laws that suit big companies and penalise the rest of us. But that’s no reason to deprive the fiscal fiend of his tribute. The bottom line is, if you don’t pay, he’ll find you and put you out of business before you can think about handing over to the next generation.

Make some of your non-family people senior executives and give them some skin in the game: Your relatives aren’t always the sharpest tools in the box. Have an independent board of directors. Be in hotels, booze, food ingredients, sweets, Japan, Italy or Germany if you want your company to be around for the next 1000 years.

Commit to being a family-owned business for generations to come: Longevity rules. Have lots of adult conversations: The most important conversations are the ones you don’t have. Communication is one of the biggest problems in families and family companies. It’s hard to have adult conversations about the really important but sensitive issues, so most things go unsaid.

The customer is God: In most western countries the customer is meant to be king or queen and at the centre of all we do. However, in Japan, the country with the longest lasting family businesses, the mantra is Okyakusama wa kamisama. The customer is God.

Have a happy family: Dysfunctional families equal dysfunctional businesses. As we saw, the odds are against family businesses. You need to take a long-term view, take succession seriously, and call all-in family meetings.

Ten Commandments for Long-Term SurvivalBy John Connolly(Article, page 2 of 2)

Sourcehttp://www.theaustralian.com.au/business/the-deal-magazine/family-business-10-commandments-for-long-term-survival/story-e6frgabx-1227488911127



14 Questions to ask yourself as you transition away from a full-time roleBy Insights.org.au(Article, page 1 of 3)

Research shows that Australian family business leaders are putting off retirement and succession, many to the detriment of their businesses.

Whether it’s because of underfunded retirement plans, lack of succession or sales options, or a sheer unwillingness to relinquish the reins, family business leaders are increasingly delaying the transition to retirement.

Part of the issue may be that family business owners often have more complex retirement situations than their non-family counterparts.

First, there is the issue of transferring management or ownership of the business, as well as the issue of transitioning to non-working life. Some owners choose to retire while maintaining an ownership stake; others sell or pass on the business as part of retirement.

After the global financial crisis (GFC), many business owners have found capital and potential buyers in scarce supply, complicating the financial transition.

A 2013 survey (http://mybusiness.com.au/news/survey-finds-family-business-owners-delaying-retirement) found that just 24 percent of family business owners had experienced increased profitability in the previous three years. Fewer than 40 percent expected their business and market prospects to improve in the succeeding year.

Owners who have not planned ahead for succession may find themselves forced to put off retirement until they can find either a buyer or a successor who is trained and ready to take over.



Start the retirement planning process soon

Retirement and succession can’t happen overnight. Much like you wouldn’t take an extended trip without some forward planning, it’s not possible to successfully make the retirement transition without advanced preparation and a roadmap.

Think carefully about the financial and business requirements for an eventual retirement. Ask questions such as these:

• What structures will need to be in place before you can leave?• Who is qualified to take over your role within the business?• How will you fund retirement?• Are your personal and family assets separate from the business?• How will you financially exit from the business?• Will you need external sources of capital to provide liquidity for an exit?

Value the business and identify options

Funding retirement looks different for every family business owner. Whether a sale is intended or not, understanding what a business is worth is critical to preparing for the ownership transition.

Unfortunately, most family business owners haven’t undertaken a valuation exercise and may have unrealistic expectations of the value of their business.

Realistically, most buyers will be more interested in the potential cash flows and book value of the business. Poor capital and management structures can take away from the value as can a business that depends too much on the contribution of the owner or other key employees.

Understanding the key drivers of growth and profitability will be key to preparing a business for sale or transition and also prevent a business owner from being blindsided by issues during the sales process.

Re-purpose and re-focus life

For many business owners, work is their life. Emotionally, retirement can seem like being put out to pasture rather than a well-earned period of relaxation and enjoyment.




Many Australians can look forward to living well into their eighties or nineties. Sitting around at home for that length of time isn’t realistic for healthy, active, ambitious people and many find fulfilling roles in second careers or through volunteer work or philanthropy.

Likewise, family business owners should rethink their vision of retirement: rather than treat it like a never-ending vacation, think of retirement as simply another phase of life with a different focus.

Thinking ahead about creating a fulfilling next phase of life can make the work-retirement transition much more appealing. To help delve into the issues involved, ask questions such as:

• What gives you pleasure and fulfillment?• Where is your ideal place to live?• What would you like more of in life?• What would you like less of?• Who would you like to spend most of your time with?• What other business or personal interests do you have?• What gives your life purpose once your basic needs are covered?• What would you like to be remembered for?

The bottom line

Ultimately, today’s business leaders are going to have to confront their eventual need to exit the business.

Whether they leave on their own terms and move on to comfortable, fulfilling retirements or are forced out of their careers by illness or age, a change is coming.

My hope is that family business leaders will take the time now to think about their personal vision of retirement and take steps to prepare for a comfortable financial, business and psychological transition to a post-work life.




Sourcehttp://intheblack.com/articles/2015/09/08/rethinking-retirement-for-family-business-leaders

Three Barriers To Success In Your Family Business... And Tips to Overcome ThemBy Insights.org.au(Article, page 1 of 3)

Overcoming Barriers To Success In Your Family Business

Family-owned businesses have tremendous advantages stemming from their special status: deep community ties, values, family traditions, and the ability to take a long-term view of success. However, family businesses also face unique challenges. The most successful multigenerational family businesses are able to overcome these barriers, incorporating new ideas while retaining the competitive strengths that made them successful in the first place. Let’s talk about some of the common obstacles that arise in family businesses.

Barrier 1: Failing To Keep Non-Family Employees Happy

Are your non-family employees happy and fulfilled in their jobs? If not, you may be damaging your firm’s ability to retain talent. One common complain that we run across is that non-family employees feel that there is a ceiling to their career progression within the firm. Since they are not family, they may be barred from top positions within the business or think that they don’t have a clear way to move forward in their careers.

If you want to retain key employees (and you should), it’s critical that you make them feel that the firm’s success benefits them as well as your family. Consider allowing key employees an ownership stake or initiate a creative compensation scheme. Bonusing well or offering some share of the firm’s profits can help align their interests with the firm’s and motivate key non-family employees to stick with your firm.



Barrier 2: Letting Family Drama Affect The Business

Though family relationships may be key to your firm’s culture, sour dynamics between family members can be very damaging to business success. One of the problems we see over and over is that family members may lack an avenue to express their wants, needs, and concerns – personal and professional. When family members don’t feel heard by others (especially matriarchs and patriarchs), family drama can spill over into the business.

Non-family businesses have natural barriers to conflict; it’s unlikely for two employees to be so angry at each other that they will overcome workplace boundaries and escalate the fight. Lacking a Human Resources department, many family firms lack formal rules and processes for mediating disputes, making it hard to handle the inevitable spats that can arise between employees.

Though we’ll never be able to completely do away with family drama, formal structures like family councils, boards, and forums offer safe spaces where grievances can be aired and problems mediated. We strongly advocate for formal governance as a way to help a family business retain the values and intangible capital that makes it strong while managing conflict.

Barrier 3: Lack Of Professionalisation Within The Business

I’ve often spoken in this column about the importance of professionalisation in sustaining a family business through generations. Family firms, particularly those within the first or second generation where the founder is still involved in the business, tend to be more casual than their non-family counterparts. The problem is that this informality often leads to a lack of strategic or succession planning, and can limit the business’ access to outside expertise and capitalisation.

Professionalising a business doesn’t mean giving up the values and identity that makes a family firm strong. Quite the contrary: professionalising means making better use of internal resources, separating ownership from management, and creating strategies for the future of the business, among many other things. We teach our clients to associate professionalisation with taking their businesses to the next level of growth.




Final Thoughts

Family businesses tend to go through predictable patterns of growth and development, and the barriers discussed here are natural parts of running a successful firm. If you’re feeling isolated or frustrated as a business leader, it can be enormously helpful to reach out to other members of the family business community for support.




Sourcehttp://www.finh.com/newsDetail/?7th-of-May---Three-Barriers-To-Success-In-Your-Family-Business...-And-Tips-to-Overcome-Them-177

20 Reasons to Start a Family BusinessBy Daphne Mallory(Article, page 1 of 3)

The best way to build wealth and leave a legacy is to grow a family business.

Think of all of the family businesses whose products, services, and generosity you benefit from on a daily basis. Your family name can be added to the history books for creating a better society and uplifting others out of poverty. Here are 20 reasons to start your family business today:

1.Build wealth for generations to come. The wealth you generate in your lifetime can benefit future generations. Reinvest a portion of your profits back into your business, your community and other investment vehicles, such as real estate, to ensure future wealth.

2.Transfer family values. Business presents many opportunities to make choices that promote or contradict your family values. You’ll have a great supply of teachable moments to share how and why you make decisions.

3. Grow as a leader. Building a family business demands leading others. You will have to grow as a leader if you want to succeed.

4. Make history. Your family name will be remembered because of your contribution to the economy of your community.

5. Strengthen inter-generational bonds. Grandparents can work alongside grandchildren in a family business and they can share their culture, experiences and knowledge along the way.

6. Get Quick access to capital. Your family can become your initial angel investors, giving you the start-up funds for your business.



7. Share your work load. Working solo takes its toll eventually. Spread your workload with your family.

8. Increase Sales. Your family story is your competitive advantage. Your clients and customers will remember you when they make the decision to buy.

9. Climb out of unemployment. You are your best employer. If done right, you can climb your way out of unemployment with a family business.

10. Enjoy flexible work hours. I wake up at 2:30AM to get many critical tasks done before my children wake up. You might be a night owl and prefer to do those tasks after your children are asleep. Either way, you may be able to maintain flexible hours for your family business.

11. Improve your family’s health. You can schedule health related activities, such as running or biking together, when you work together. Organize a hike or bike time in the middle of the workday or in the evening.

12. Build a foundation. Did you know that many foundations are started and run by families? That’s the beauty of family business. You can help to eradicate poverty and improve the quality of life for others.

13. Become a community leader. Large companies send their leaders to visit city officials, attend community meetings and participate in service clubs because they understand the correlation between business and community leadership. The good news is that a family business owner can become a community leader, and in some cases, has more influence and credibility.

14. Build other communities. When I moved to the United States, I understood my obligation to one day help my fellow Liberians and other Africans who continue to struggle with poverty, disease and corruption. My family business serves my children, but it’s also a vehicle for me to promote awareness and raise funds to help women and children in my country. Where are you from? What international community do you want to help?

15. Become a life-long learner. You won’t stop learning when you run a family business. Industries, products, clients, selling and technologies change. You won’t get bored.

16. Gain new skills. We’re living in a world where skills are more valuable than academic knowledge. The skills required to start and grow a family business are valuable to colleges, internship programs, fellowships and adult learning opportunities.




17. Create jobs. You benefit from a community that thrives economically. You can create that by providing jobs.

18. Invest in other businesses. The easiest way to build wealth for your family is to become an investor. Family business will provide you the money you need to invest in other businesses.

19. Run for office. We need more family business owners to run for office. Your family business will generate the connections, credibility and capital to run for office and make a difference in your community or nation.

20. Maintain a wealth of knowledge. When families are fragmented, cultural and business knowledge gets lost. Working together helps to preserve both.

The benefits of running a family business far outweigh the negatives. Think on the positives which will keep you motivated in the start-up phase.




Sourcehttp://www.huffingtonpost.com/daphne-mallory/20-reasons-to-start-a-family-business_b_6937316.html

Breaking the cycle of family business failureBy David Harland(Article, page 1 of 3)

What does it take to build a successful multigenerational family business?

Many of the world’s most enduring companies are family businesses. Coopers Brewery, Walmart, Samsung, and BMW all have a controlling family dynasty at their centre.

But these successful family firms are a rarity; most family firms fail to survive multiple generations. The statistics are grim: only 30 per cent of family businesses survive the transition from first to second generation. Just 12 per cent reach the third generation. Why do so many successful family businesses fail after the founding generation?

In my years of experience as a family business adviser, I have seen generational transitions fail for many business and family reasons, and I’ve seen several common threads connecting many failures.

One major reason is a lack of financial education for children born into wealth. Heirs that are ill-prepared to manage money make poor decisions and squander their fortune. Perhaps the most famous example of dissipated wealth is that of the Vanderbilts, once one of the wealthiest families of the Gilded Age.

During the mid-1800s, Cornelius Vanderbilt built the family’s fortune on railroads and shipping. At its height, his fortune totalled over $240 billion in today’s dollars, making him one of the wealthiest businessmen in history. While Cornelius was a self-made man, his descendants lived extravagantly, with little concern for preserving the family fortune. By the 1970s, there wasn’t a single Vanderbilt millionaire left.

The Vanderbilts had also fallen prey to another common problem: the dispersion of wealth and control among many children, in-laws, and other relatives. This left the dynasty with too many decision-makers and not enough concentration of power to push through important decisions.



Many families fail to nurture a sense of responsibility, history, and family values in the following generations, neglecting what we call the spiritual and family capital of the family business. Great wealth is a privilege and without a sense of stewardship and obligation, many rich descendants fall prey to ennui and boredom, failing to safeguard the family wealth or treat the business with respect.

Many problems also happen at the intersection of family and business. One key issue that many fail to overcome is a culture of nepotism, which promotes unqualified relatives into positions of power simply because they are members of the founding family. Another issue is a lack of formal governance structures and succession plans that leave the business open to power struggles, family discord, and transition problems.

A cautionary tale in this vein is that of the Anheuser-Busch company, which had been successfully run by five generations of the Busch family until it was bought in 2008 by InBev in a hostile takeover.

The final years of the Busch family’s tenure were marked by family conflicts, power struggles, and financial mismanagement, dooming a 150-year-old company that had survived prohibitioners, world wars, and global competition.

If you are the head of a successful family business, what can you do to ensure that your dynasty survives into the third, fourth, and fifth generations? A great deal.

In my opinion, the most critical lesson is to take good care of the family side of the business and develop a long-term plan for your family’s future.

Educate the next generations about wealth and responsible financial management as early as possible. Too many wealthy parents fail to teach their children how to responsibly manage their inheritance. Protect the family wealth by insisting on premarital agreements and separation of personal and family property.

Cultivate a family culture around your family’s history and shared values. One way that many successful multigenerational families nurture a family legacy is by developing shared philanthropic ventures that help instil respect for family wealth and its future potential. Don’t make working in the business a requirement in the family; allow each member to find their own way in the world, within or without the business.




Protect the business’ future by instituting formal governance and ownership structures that separate family control from the daily management of the business. These arrangements will make it easier for the firm to raise capital, bring in outside investors, and eventually navigate generational transitions.

Professionalise the business by establishing employment standards for both family and non-family employees. Consider bringing in professional managers to run the business while retaining ownership stakes for your family. Most successful multigenerational family firms are largely run by professional non-family executives while members of the family focus on diversifying and managing their wealth.

Begin planning for the eventual succession of your business. Whether you intend to train up an internal successor or bring in outside managers, proper succession planning takes years. Too many business leaders leave planning too late and put the business at risk of a sudden, unplanned transition.

Family discord, power struggles, spendthrift grandchildren, and poorly qualified managers can all doom a family business. Ultimately, success requires many factors to align as well as a healthy dose of luck. Developing a successful multigenerational family business doesn’t happen overnight. It requires years of planning, careful management, and the cultivation of a family culture that prioritises stewardship and a family legacy of success.




Sourcehttp://www.finh.com/newsDetail/?31st-of-January---Breaking-the-cycle-of-family-business-failure-168

The Future of Family BusinessBy Business Families Foundation(Video)



Watch the five minute video here:https://vimeo.com/141449332

The Future of My Family Enterprise - What Options are Available Business FamiliesBy Lansberg·Gersick & Associates(Video)



Watch the three minute video here:https://www.youtube.com/watch?v=4sqe1DB20lc



Thanks for reading our Family Business Survival Kit.

If you would like further guidance on understanding family businesses, Insights offers a catalogue of over 300 free family business videos.

It features short (1-4 minute) videos of global family businesses discussing the challenges they have faced, how they have dealt with them and continue to grow and remain successful.

Get your free access here http://insights.org.au/education-tools/free-access

We also provide short tutorials and online courses specifically for family businesses to do in their own time.

You can contact us on:

T +61 (7) 3229 7333E [email protected] www.insights.org.auF facebook.com/familybusinesstoolsL inkedin.com/company/insights--customised-family-business-resources

Kind Regards,

The Insights Team

Family Business Survival KitBy Insights.org.au