Honestly, they take care of us like our business was actually their business.
Family business owners have their own unique challenges. These issues are not necessarily typical business issues and oftentimes they have more to do with interpersonal problems between family members, business governance, strategic planning, business culture, business succession, leadership development, and key employee retention.
Communication and Conflict Resolution
– Family members doing business together oftentimes struggle to communicate properly.
Our team at Cook Martin Poulson can help families develop a corporate culture and family vision, thus allowing alignment in business and family pursuits. Creating alignment through shared values and business vision will help individual family members place more emphasis on business and family goals rather than simply looking at their own personal situation. Developing communication policies can help families communicate appropriately level while in a work environment. Clear and authentic communication can help families make better decisions and create stronger, more authentic relationships.
– Many family businesses have yet to create an organizational chart that includes job descriptions for corporate officers and managers. The most successful family business operations have a functioning board of directors that develop the strategic vision and plan for the firm, and then hire appropriate corporate officers to execute the plan.
We have experience working with families to create a functioning board of directors and the strategic vision to accelerate business development and growth through business consultations. Numerous CMP professionals serve as advisory board members for family businesses to assist in the development of effective policies.
– According to familybusinessinstitute.com, “Only about 30% of family businesses survive into the second generation, 12% are still viable into the third generation, and only about 3% of all family businesses operate into the fourth generation or beyond.” Unfortunately, the odds are not in favor of family business survival, so it is surprising how many family businesses fail to plan for passing the business on to the next generation.
Many families have created their identity through their family business and have a great sense of pride and accomplishment as a result of their successes. Transferring the family business to future generations will likely be their biggest challenge as many family business owners view succession as an event rather than a process. In reality, the sooner the process of succession planning is started, the greater the chance of a successful transfer.
We have developed a workbook to help family business owners identify critical issues related to the succession planning process and to help them gauge where they are in the process. Using these tools and the professionals at CMP, business owners can work to create a road map to start the process of succession planning.
Leadership Training and Development
– Many family business owners see their successors as having developed a business acumen just as they did.
However, in order to create qualified and motivated future business leaders, family business owners need to develop and communicate expectations to family members who want to participate in the family business.
The development of a Family Strategic Plan that defines family values and the overall vision will help create alignment in the family so that family members will understand what will be expected if they choose to work in the family business. Working to develop family members through education, experience, and mentoring will go a long way in creating competent successors.
In addition to developing family members, business owners need to be cognoscente about how key employees may react to any changes in business leadership. Employee retention programs will be important in retaining employees who are valuable to the business. We have experience with stock option plan design, phantom stock arrangements, profit sharing interests and arrangements, non-qualified retirement plans and qualified retirement plans design and administration.
Entity and Trust Structure Oversight
– A family business can have many moving parts and it can sometimes be difficult to manage numerous entities and trusts. Tax efficiency is paramount in business succession and estate transfer. We have extensive experience working with legal counsel to help design the entity structure that creates asset protection and saves income and estate taxes.
Once the attorneys are done putting together these structures, they are not always fully implemented- simply because those in the family business are not sure what needs to be done.
A structure is only as solid as its base. We have experience in helping oversee the operation of complex entity and trust structures. We can help step in, oversee, and implement these structures that have been drafted by your attorneys to help fortify the base so that the owners can continue to focus on what they do best.
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