Families practicing best practices anticipates and prepare for whatever comes next in developing their family business and the possible outcome of their decisions.
Family business who desires to excel in their business should also be vigilant so it is necessary for them to conduct a mini audit, identify their strengths, weaknesses, opportunities on their chosen processes.
Employing Family Members. There should be a written policy early in the life of the business especially on employment. Available positions in the business should be advertise. Family members coming in should have management experience from other establishments/industries so they can bring in broader perspective, fresh ideas and skills so that they can contribute in whatever business challenges that may come in.
A policy for remuneration emphasizing positive values, value for a certain job, negotiation for personal goals and pay incentives. There should also be performance evaluation. Benchmarking will also assist you in your pay scale.
This is necessary to be held at the boardroom to let everyone feel that this is business. Owners should assure the continuity of the family business. This is also the avenue where they can discuss and resolve conflicts before they become unmanageable.
Board of directors should be qualified and independent family members. They are necessary to professionalize ownership and management. If getting a set of board of directors is not possible, then they should have an advisory board who are experience and knowledgeable in the business they are in.
Develop a Charter. This is a family code of conduct that guides the family in setting aside family relationship and the business.
Create a family Council. This is compose of respected family members that serves as a buffer between the family and the board running the business so that not all issues of the family members will be tackled by the board.
Develop a Succession Plan. If you want your business to continue in family hands, a succession plan should be in place. Potential successors who are willing should already be develop. Family values/culture should be instilled.
For assistance on succession planning and financial advisory services, Melbourne Accountant offers a wide range of expert services from business creation to succession.