Ask A FEA – Steve Legler on Family Members Who AREN’T in the Business

Question: Why is it important to consider family members who AREN’T in the business?

STEVE: As a family business, you will greatly increase your chances of successfully transitioning your family’s wealth to subsequent generations if you shift your focus away from thinking of yourselves as a “family business” and instead concentrate on the fact that you are a “business family”. That means that the family is a primary concern, not secondary. All family members, even those who don’t currently work in the business, are certainly important stakeholders. They care about the business and want it to succeed, and they are affected by everything that happens to it. Those who work in the business are obviously closer to everything that goes on there, but they ignore the other family members at their peril.

Besides the business and the family, don’t forget that ownership is also a consideration, and some family members who don’t work in the business often become owners at some point, which can create a whole new series of complications. All the more reason to keep everyone informed and get into good habits of communicating with all family members. Just because they may complain about too much “shop talk” around the dinner table, that doesn’t mean they don’t care; it means you need to find the right time and place to communicate effectively around these issues, while maintaining important family boundaries as well.

Join Steve and other members of the family enterprise community in conversation at the Canadian Family Enterprise Forum, happening April 20-22, 2021.