Rethink being a Family Enterprise

Going down the path of being a family enterprise is not easy. It is hard! Being willing and capable to build healthy characteristics is an important step. Answering no to this question may be an opportunity to take a pause. There are many things to take into account:

• Need to ask some hard questions
• Are your responses in favour of continuity?
• Success is in taking the right path for the family even if it is selling the business or deciding not to be a family enterprise, are you taking the needs of the family into account?
• This is the part of the relay race you are holding the baton together, are you as a family in the same race?
• It is a process. Are you willing to take the time needed even when the results are not apparent at present?
• Follow the “decision tree” as an aid to the right pathway and circle back if you must. Are you willing to dive deeper into difficult questions?
• Just because you sell the operating business doesn’t mean the enterprise game is over. You can develop a “Family Office” as the enterprise to invest the proceeds of sale. Are you open minded to change your path forward?
• Where to start? It’s all so confusing to most families.  Conduct interviews with next Gen to assess their interest and commitment. Are you willing to involve the next generation to be a voice at the table?
• Specialists are often needed and available to help a family to deal with the complicated process (i.e. FEAs). Are you willing to bring skilled people from outside your present network?

There is a saying that goes: The best time to plant a tree is 30 years ago, the next best time in now.

The tree represents so many things to me as a member of a family enterprise. It represents our roots and foundation, it represents strength and weathering through all forms of weather, it represents the various branches and how different we are. It makes me think of a quote I often recite: “Families are like branches on a tree. We grow in different directions, yet our roots remain as one.”

Here is a great example of the paradox between autonomy and family: Does one focus on their individual needs or that of the family? Do you give up your goals to achieve the goals of the family? Do you think of yourself and take the family for granted, thinking that family is family and it will always be there if I like it or not? As noted in another article we wrote, it’s not an ‘either or’ scenario. To achieve success in a family enterprise it is the art of managing both – fulfilling the individual so the family unit succeeds in harmony. The beauty of being in harmony is that each individual carries their own note and together with their family members come together to make beautiful music. Carrying their individual strengths and coming together to be an unbreakable force. This is the power of Human Capital.

For a family enterprise to come together as a unified family there is much work to be done. The most important is communication and bringing forth topics with intention to create a continuity plan. In doing so you need to ask some hard questions.

Sometimes we come down a path only to realize we are not in the right place. Some families are not meant to own let alone manage assets together and that is okay. In the end being a family enterprise is making decisions that are best for the whole system and sometimes the best decision is not to be a system at all and to separate ownership from family and family from the business. When you make this decision that has been well thought out and communicated than that, in itself, is success in my eyes.

If you relook at the path forward and decide being a Family Enterprise is not your path forward then focus on all the elements of a healthy estate plan. To remain healthy don’t tie in your next generation and force them to co-own assets through the documents of your estate planning.  Be sure your beneficiaries are aware of your intentions and don’t leave any surprises. Your good intentions, if not spoken in your living years, can very easily be misinterpreted and bring all your planning to shambles.

For good or for bad, your planning has not come to an end. For a proper estate plan is best in place when revisited every 5 years.

“There are dreamers and there are planners; the planners make their dreams come true.”

Decision Tree Question: Is your best path forward being a Family Enterprise?