Entries Tagged 'Family Owned Business' ↓
June 7th, 2010 — Family Owned Business
“I want to bring my son into the business. He runs a business of his own that is related to what my business does. I am concerned that his business doesn’t make enough money to support him, and as his life progresses, a family as well. What do you suggest?”
Bringing a son or daughter into an up and running business is the dream of many parents. Unfortunately it’s a dream fraught with challenges. The success rates of second- generation companies are only slightly better than those for a startup, which should really make you take pause.
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September 1st, 2008 — Family Owned Business
“This family owned business was started by my parents, and I need help with ownership transition. I?ve been working here nearly 10 years. My problem is this: I can?t get my parents to let go. Each year I take on more responsibility. And each year we have more disagreements about how things should run. For example, when it comes to strategic planning – we have nothing on paper. I know they mean well, but their need to control is frustrating, and it gets in the way of progress. Since they?re the majority stockholders, there?s not much I can do about how decisions are made when there?s a disagreement. I feel like I?m walking through quicksand some days.”
Generational transfer and family business ownership can be very tricky issues. Family businesses survival rates are low: less than 1/3 make it to the second generation, less than 1/6 get to the third. This low business survival rate exists, even though the turnover volume is high: close to 90% of U. S. businesses are defined as family owned and statistics indicate that over 1/3 of them are dealing with inter-generation ownership transfer issues right now.
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March 3rd, 2008 — Family Owned Business
My son has been in our business for just a little while, now, and I?m looking for some advice. He?s pushing me hard to let him take control and run. I?m concerned he doesn?t know our business well enough, yet.”
He?s smart and capable. And he had experience in another business before joining us. On the other hand, I?ve got lots of years of experience and can see the traps he?s likely to step into. How do I protect him and keep safe the business I?ve worked so hard to build. I can?t afford to have him blow up the family legacy. Thanks for sharing your thoughts.
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January 14th, 2008 — Family Owned Business
Our family is close. My daughter grew up around the business, helping out summers, and listening to discussions at the dinner table. Now she wants to join the company full time. I?m concerned that it?s a big leap from helping out, to entering the business as a young adult. And I?m worried that people who have worked here a long time may not know how to handle her joining us with real responsibilities. What do you suggest?”
You have a right to be concerned. Under half of all family owned businesses make the transition from first to second generation and less than 1 out of 5 make it to the third generation. Problem areas include financial disagreements about income, asset distribution and generation transfer. Lack of skills, improver task assignment, the need for management and different views on accountability can also cause problems. Here are some suggestions to help you get through a transition.
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April 10th, 2006 — Family Owned Business
“Help! We?re a second generation, family owned and operated business. We have family members from this generation working in the business. All the stock has been passed to this generation. Now we have to figure out how to go forward. We have to figure out roles, responsibilities and compensation. What makes it complicated is that we have different skill levels, different personal goals regarding hours worked, and different preferences for work we do, and don?t want to take on. How do we set things up, so it?s fair for everyone?”
Big question! One of the most divisive parts of family owned business is the issue of compensation. When it comes to sharing the wealth among family members, it?s not just about money, but also about power, recognition, position, and future prospects. The discussion of compensation is complicated by years of personal history
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February 6th, 2006 — Family Owned Business
“My son-in-law wants to join me in my business. I could use some help with the business. I?m just not sure if this is right for either of us. What should I do?”
We talked with the owner and got some additional details. The business is over 20 years old, stable and successful. Each year the company has grown a little more reaching $1 million in revenue nearly 10 years ago. The company provides a good living for the owner, who is careful about managing the finances.
The owner, who is in her early 60?s, sees some industry changes that concern her. And she is starting to think about when, and how, she will exit, in about 5 years. It appears that the owner will need more income from the company in order to retire comfortably – whether from increased bonuses over the next several years, or from a sale. The son-in-law currently works for another small business.
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