There comes a time in our life when for many people they hope to plan for a family and dream and work towards having children and raising them. We hope to guide and steer our children in the challenges of life and all that society requires to raise healthy, balanced adults.
By the time they reach university or enter the working world the primary role of nurturing and raising your children is fulfilled and you stand by them as they find their way in life.
However, when it comes to a family business – that is exactly the time where the birth process begins and rearing takes place again.
The decision to turn an enterprise into a family business by bringing one’s children into ownership or management is among the most profound and petrifying choices that an entrepreneur can make. Those who have faced that decision can attest to sleepless nights and the weight that comes with these processes.
The worries of the family founders are many:
- Will the children be interested and capable?
- How will other employees react to their joining the business?
- If more than one child joins the business, how do I pick the leader?
- Can I objectively evaluate my children’s performance?
- What kind of working relationship will I have with my children?
- How do I handle their compensation?
- What if they join and carry on the business out of a sense of loyalty to their parents rather than out of sincere desire?
- What if getting a job in my business is just an easy way for them to get situated?
- And the biggest fear of all: What if owning a family business wrecks our family’s relationships?
Answers to such questions don’t come easily. The specifics of each situation vary the number of children; their ages, personalities, skills, and interests; and the timing of their entry into the business.
It is therefore fundamental that before a founding entrepreneur tackles these areas that they are empowered with the right information to make the best-informed decision.
What To Ask
Questions your children need to think about as they map out their futures include the following:
- How do we prepare for ownership, and what are the responsibilities?
- What will we do if taking over the business doesn’t work?
- What family and personal risks should we consider?
- What involvement in the business for our parents would please them, and what are their financial-security needs?
- What are the requirements of good business leadership?
- How will we make decisions as a family team in the next generation?
- What do we have to do to be a strong family in the future, regardless of the business?
The above are all areas that every founder should discuss with the next generation to ensure that planning the family business is as successful as their past efforts in planning a family.
Recognised family business can benefit from a number of incentives and guidance and support from the Family Business Office to assist them in their process of growth and continuity. For further information contact us at 22209524.