Tammy J. Buss, CFP, CLU, CH F.C., CFDS, FEA
Buss Financial Group
Question: What communication processes can help families discuss risk in the family enterprise so that this sensitive topic is addressed in a calm, respectful, inclusive manner?
TAMMY: Communication is the key in all business, particularly in a family enterprise. You likely have a different relationship with your family than you do with friends or co-workers. There is a lifetime of history. A family meeting is the best option for a family to identify and discuss their common goals, family values and the future of the business. Having family meetings promotes stronger families that in turn lead to stronger businesses. Even if you have never had a formal meeting, it is never too late to start. When you have family members at different ages and stages of their life it is especially important for everyone to be heard, and it is a great opportunity to learn and grow as a family.
Question: When helping your clients to identify and manage risk, what risk factors do you consider that are unique to family businesses?
TAMMY: Risk in a family business is different because anything that impacts the business also impacts the family and vise versa. They are seen as one unit. Having a strong, healthy family relationship is imperative to keep moving forward and give comfort to the business relationships. If the family is not united, it can cause tension or uncertainty in relationships with employees, clients and suppliers. Family meetings are essential to overcoming this issue.
Question: How can business families effectively manage different risk profiles within their family?
TAMMY: Family meetings are a good place to address individual differences in a safe space. We all have different risk profiles based on our personalities, age and stage of life. No one needs to change, but all parties deserve to be heard and have their feelings and concerns addressed and understood. Communication is the path to working together and finding a solution that works for the whole family. Every situation will be different and must be viewed in that way.
Bringing in an expert to educate the family on risk profiles and the psychology behind the differences may be a good way to create a more cohesive and open environment that embraces open, honest and constructive communication where all concerns are addressed and understood.