Whether you are a royal family or an entrepreneur, every family with any assets to leave to the next generation puts family members in business. Occasionally, the estate’s assets are easily and quickly disseminated over a short period of time with understanding and harmony.
Billion-Dollar Babies, Carpenter’s Sons and GenXers All Need a Strong Family Culture for Future Success
More often, unresolved issues, surprises and mistrust become part of the process with long-term consequences. Sometimes, businesses are complex stand-alone operating enterprises, in which issues of fairness and favoritism present themselves in ways that are not easily resolved.
Business itself is complex, demanding administrative, technical, moral, and emotional maturity of the management before production, marketing, and sales are considered. When the emotional complexity of family equality, ownership, and fair returns are blended with the demands of management capabilities, family or business – or both – can pay a heavy price.
Scroll down to Related News Articles: Business Succession for more information about how to prepare your family business for the next generation, how to create a business succession plan, and more.
Strong Family Structure Helps Ensure Successful Business Transition
The Family Trust Institute believes that the best way to ensure that a family business survives for future generations is to first establish a strong family structure and philosophy based on the trust-makers values and priorities that promotes family communication, unity, and harmony. Best practices honor and support the family separate and apart from business, with forums for family harmony, well-being, and the successful transition of wealth unrelated to any family business.
New Technologies Help Business Grow
In this age of creative destruction, new technology and educational requirements well beyond what older family members ever had available to them offer:
- More opportunities for vision
- Engagement of younger family members to add constructively in unique ways
- Spin-off opportunities that can eventually dwarf the original business
Diversity Supports Strength & Growth
Families that engage the diversity of individual strengths and interests creatively, and support the internal family culture as important independent of business matters, have a better chance at long-term success.
Such families will pass on a family culture that can grow and rebuild, if necessary, without negative patterns of internal destructiveness.
Can Your Business Survive The “3 Generation” Rule?
It is a commonly held belief that family wealth rarely, if ever, survives through more than three generation. The Spanish put it succinctly in the 1500?s: “First generation, Trader; second generation, Gentleman; third generation, Beggar.” Here in the US, the expression has been “Shirtsleeves to shirtsleeves in three generations” since the 1800s.
While it is true that vast fortunes have been squandered throughout history, examples of success and growth of family businesses and wealth throughout history prove that with careful forethought and planning, a family’s legacy can survive. For statistics and more information about estate transition, read our article, 500 Years or Only 3 Generations: How Long Will Your Legacy Survive?
Related News Articles: Business Succession Planning
A Lesson from the Royals: Succession Is a Two-Way Street
The images released last week of Prince George Alexander Louis – the first since he left the hospital with his parents, Prince William and Kate Middleton – were a clumsy attempt to portray him as an ordinary infant. Although the photos were taken in the Middleton family garden, rather than at Kensington palace, the pictures are not very convincing in this respect. Truth is, this baby is worth billions of dollars, and a lot is riding on his succession.
Read more: A Lesson from the Royals: Succession Is a Two-Way Street (opens in new window)
Preparing a Family Business for the Next Generation
Baby boomers are reaching retirement age at the rate of 10,000 per day, according to the Pew Research Center. That’s prompting scores of family businesses to be passed down to Gen Xers and millennials. Of course, such transitions are seldom easy, and they can be made more difficult due to generational disconnects. I asked family business experts for their advice on intergenerational family business succession. Their dos and don’ts follow.
Read more: Preparing a Family Business for the Next Generation (opens in new window)
How To Create A Business Succession Plan
For many small business owners, maintaining positive cash flow and a stable balance sheet can be an ongoing battle that consumes virtually all of their time. Even retirement often seems like a distant speck on the horizon, let alone plans to hand over the business. However, establishing a sound business succession plan is beneficial for most business owners and can be absolutely necessary for some.
Read more: How To Create A Business Succession Plan (opens in new window)
How to Prep Your Family Business for the Next Generation
Baby boomers are reaching retirement age at a rate of 10,000 per day, according to the Pew Research Center. That’s prompting scores of family businesses to be passed down to Gen Xers and millennials. Of course, such transitions are seldom easy, and they can be made more difficult due to generational disconnects.
Here are some tips from family business experts on making intergenerational family business succession a success:.
Read more: How to Prep Your Family Business for the Next Generation (opens in new window)