By Julia Frey. The summer makes me think of families and good times together. But it also makes me think about how family businesses best survive and thrive. Oftentimes, there is one individual who starts a business with the intent to grow it into a sustainable family business. But as the business grows and as that founder ages, it is sometimes hard to find a balance between children of the founder of the business and a business structure that is viable. The issues in the transfer of a business from one generation to another, has to begin long before the actual transfer occurs. For example, a family business must reflect family values and goals, and must have a proper way of reviewing performance even of family members and oversight. Once the founder dies, if this type of structure and accountability has not been put into place, the business may run into problems that may force it to be sold. For example, issues often arise in a family business when it is run by one or two children-owners but there are other children-owners who are less involved. The business must be structured so that there are mechanisms to ensure that the children running the business don’t treat it as “only their own”, that they follow standard procedures and that they function business-wise as any business would, such as having salary structures commensurate with the industry, expenses being clearly divided between personal and business etc. It is never too early to have your trusted attorney advisor get involved to help you set up a structure for sustainability and growth. Please call us.
