The owners of a family business sit at the center of a complicated web of choices that profoundly shape both the family and the business. These choices have long-term implications like who will lead the family business, and how – or if – the next generation will own the business, as well as more immediate impacts, like how much money is reinvested in growth or distributed in dividends and which assets in the portfolio should be kept or sold.
Many people – family members, executives, advisors, and so on – have input into these choices, but ultimately the family owners will chart the future. Therefore, the success or failure of a family business depends more than anything else on how well its owners can work together to make decisions.
Our role is to help the owners of family businesses to identify their long-term goals and take the actions required to achieve them. Tensions in family relationships can undermine the owners’ teamwork and sometimes must be resolved before the owners can act. When that is the case, we help the owners to establish a foundation of trust and effective communication.
While every family business is unique, our experience suggests that each must address five core questions: