Family Business Planning

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What is Family Business Planning?

Family business planning involves creating goals and objectives, assessing ownership and management succession issues, and hiring professional advice when necessary.

Establishing a mission statement, core values, a well-structured plan, and consideration of personal preferences and financial needs are key to ensure family businesses remain successful.

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Purpose of Family Business Planning

Succession plan

A succession plan should include a timeline for assumption of responsibilities, criteria on who has the authority for decision making, and provisions for any potential conflicts between family members.

Mission statement & core values

A mission statement and core values helps to guide the direction of the business and ensure consistency within the organization and ensure that everyone is working towards common goals.

Address ownership & management

Family businesses often have complex ownership structures, so it is important to determine exactly who has what authority for decision-making.

Why Family Businesses Should Prioritize Family Business Planning

Family businesses should prioritize business planning to ensure long-term success. It helps define ownership type, structure governance, determine what success looks like, and create a succession plan. A strong succession plan is necessary for seamless transition of management and ownership. It also can help avoid conflict among family members. Business plans provide guidance and roadmaps to set goals, develop strategies and measure progress.

How Family Business Planning Works

A well-crafted family business plan can provide the basis for decision-making and foster collaboration, allowing family members to work together on objectives while reducing misunderstandings or miscommunication.

Analyze

Understanding ownership and management issues is essential in order to plan for the future of the business. This includes determining who will take over ownership and management roles.

Plan

Developing a timeline for assumption of responsibilities that includes when each family member will assume their respective roles, as well as any training or development they may need.

Benchmark

Establish benchmarks and criteria to ensure that everyone involved understands their respective roles and responsibilities, which can help prevent conflict and confusion down the line.

Common problems with Family Business Planning

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Family conflicts

Conflict between members of the same family can arise due to competing interests and personal disagreements.

Lack of communication

When communication breaks down it can make it difficult for family members to effectively work together.

Lack of planning

Without proper planning, it can be difficult to ensure that the business will continue to be successful after the current owners retire or pass away.

Inadequate financing

Family businesses often lack the funds necessary to sustain operations, which can result in difficulties down the line if not addressed during the planning process.

How to implement Family Business Planning effectively

Develop a plan

Develop a comprehensive plan that outlines the roles and responsibilities of family members, as well as any financing or training requirements.

Establish an advisory board

An advisory board can provide invaluable guidance to family members on controlling the ownership, management, and transition process for the business.

Educate family members

It is important for all involved family members to understand their roles and responsibilities within the business, as well as everyone’s contributions.

Put it into action

Put the plan into action and start executing its provisions. This may require some degree of flexibility in order to adjust to changing circumstances or outside forces.

Are you a family business leader looking to expand and perpetuate your family's legacy?

Each of our strategy consultants bring 20+ years of experience in working with family businesses to help you address the key issues you face in preparing your family business to continue to the next generation.

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