Services » Family Business Advisory
The family business is so much more than just a business. It is a stew of family relationships based on love and resentment. The primary challenges faced by family businesses are to match family values to business goals. As incremental generations join the business, relationships become entangled and often lead to conflicts in all areas of operations.
The challenge of Family Businesses
More than 70 per cent of all business enterprises are family owned....but less than 10 per cent of all family businesses survive to the 3rd Generation
Family Business members need to manage the triple factors of Family, Business and Ownership to ensure that the business operates successfully.
There are several challenges faced by family businesses:
- Achieving commonality of personal and family business goals
- Conflicts between family members
- Lack of accountability
- Complications in the management of Human Resources
- Issues around power and control
- Differing values between younger and older family members
- Lack of effective communication across generations
- Professionalising businesses that started as informal family operations
- Managing succession
- Ownership issues
- Governance issues
- Protection of wealth for future generations
- Providing career opporunities for family members that are more attractive than those offered elsewhere
All these challenges need to be addressed if a family business is to maximise its potential and sustain itself as a professionally run establishment.
Professionalising the Family Business
This process should bring about the following:
- Clear distinction between family values and business values
- A set of clear objectives for the family and for the business
- Commonality of goals
- A Family Strategic Plan
- A Business Strategic Plan
- A effective Board of Directors
- Succession planning for management and for ownership of the business
- The implementation of a Corporate Governance Code
How We Can Help
In order to help family businesses achieve their objectives we provide consultancy services in the following areas:
Ownership
- Structuring the ownership of the business and other family assets
- Ownership distribution within the family - beneficial ownership versus ownership in trust
- Cultivating a distinction between Ownership and Management
- Understanding the responsibilities of ownership versus those of management
Management
- Effective involvement of family members in the business
- Remuneration levels of family members and other employees
- Involvement, where necessary, of external professionals in key areas of business
- Human Resource policies
- Definition of roles, responsibilities and reporting lines
- Composition of the Board of Directors
Succession
- Timely succession and retirement planning
- Development of a well formulated succession plan
- Recommendations on how to choose and train successors to take over responsibilities
Protection
- Providing adequately for working and non-working family members
- Assessing and mitigating business risks
- Finding opportunities to expand and grow assets
- Addressing issues relating to Wills
- Reviewing appropriate Trust and related structures
- Setting up suitable Trust structures