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'My father left the entire farm to my brother. What can I do?'

Tuesday, 09 January 2018

"Not being fully included in a will can be a matter of losing your life's Work"     Q. I am a farmer's son and am now in my fifties.

 

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Problem Solver: How do I get my father to let go after handing over reins?

Tuesday, 09 January 2018

Fergal Quinn gives his advice below to a successor on the common struggle of a famiy business Handover.     Q. I am 33 and have been

 

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7 Reasons for Enduring Power of Attorney

Tuesday, 09 January 2018

An Enduring Power of Attorney is a document in which you appoint who should look after your personal and your financial affairs in the event

 

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10 Questions to Ask Before Family and Friends Become Business Partners
Monday, 11 April 2016 11:55

 

Ringing a family member or friend on board as a business partner may seem like a fine idea, but the relationship can prove tricky to navigate--or to end, if things don't go well. "It's easy to get into business, but it's hard to get out," says Wayne Rivers, president of the Family Business Institute, a consulting firm based in Raleigh, N.C.

That means you need to take a step back and think carefully before partnering with a friend or relative. Here are 10 key questions to consider:

 

Are we in it for the same reasons?
Be clear about your goals. Do you want to expand your business and eventually sell it, or build something your family can pass down? "The mistake is not being clear about what your intentions are," says David Ransburg, a consultant with The Family Business Consulting Group, Inc., based in Chicago. If you don't have the same goals for the business, you'll have a hard time making plans or coming to a consensus on big decisions.

 

What is this person bringing to the job?
Don't let your relationship color how qualified and well suited for the job your potential partner might be. Think about the credentials and level of commitment you would expect from anyone you were giving such a key role in the company. You may want to write a job description with qualification requirements and see how the experiences of a friend or family member measure up, Rivers says.

 

Should you offer an equity stake in the business?
You need to decide whether you want to offer your new partner an equity interest in the company, and if so, how much and how soon. Not only do you want to be sure a potential partner can add value to the business before sharing ownership, but you also should consider giving the person an interest in the business over a period of time, say five years, rather than all at once, says John Davis, faculty chair of the Families in Business Program at Harvard Business School. It can be easy to deal informally with family and friends, but you want to make the terms clear in a signed shareholder agreement.

 

What will happen when we can't agree?
Resolving conflicts with family and close friends can be particularly challenging because personal feelings can easily get mixed up with business decisions. "With friends and family... you might make more knee jerk reactions," says Ira Bryck, Director of the UMass Family Business Center in Amherst, Mass. "You can be your worst self where you need to be your best self." You will need to figure out a way to remain professional by taking personal feelings out of decision-making and focusing instead on objective measurements and standards.

 

How in sync is our risk tolerance?
Despite your personal connections, you and a family member or friend may feel very differently about taking risks. For example, an older sibling who saw his parents take many risks when starting the family business might be more willing to take risks himself than a younger sibling who got involved later when the company was more established, Bryck says. Determine how in sync you are on such vital decisions as launching new products or trying out new forms of advertising. While you can certainly disagree from time to time, you don't want to constantly butt heads.

 

What will each of our roles be?
In a 2010 study of 518 family-owned businesses, the most successful ones had made each person's role in the company clear upfront, says Tracy Shaw, assistant vice president of business market development at MassMutual Financial Group, which oversaw the "FamilyPreneurship" study. For Lidia and Uli Fluhme, married founders of Gran Fondo NY, which began running an annual 110-mile cycling event in New York in 2011, the division of labor has been clear from the get-go. While Lidia Fluhme takes care of logistical aspects of the event, her husband is responsible for interacting with cyclists and handling marketing and legal matters. "He's the visionary, and I'm the implementer of what happens," she says.

 

How will we keep our personal and professional lives separate?
When working with family or close friends, the boundaries between your personal and professional lives are bound to blur. But you can maintain some work-life balance if you establish a few rules. For example, you might agree not to discuss work during family meals or to talk about personal matters at work only in an emergency.

 

How will this person be evaluated?
Family and friends tend to sweep a lot of things under the rug in business rather than addressing them, Rivers says. But you need to hold one another accountable and figure out how you will evaluate each other's performance on a regular basis. If providing feedback, especially criticism, seems too difficult given your personal relationship, you can seek out a third party for the assessments, Rivers says.

 

If it doesn't work out, what do we do?
It isn't unusual to want to change your career, but when you're in business with a close friend or family member, you might feel you can't leave because it will hurt your personal relationship. Before asking a family member or friend to become your partner, consider what might happen if one or both of you wants out. How will you handle the exiting partner's shares? Who will take over the responsibilities of the departing partner? What will this do to your personal relationship?

 

What will our succession plan look like?
Even if you both plan to stick it out for the long haul, you're still going to have to think about your successors. Unfortunately, succession planning often goes unaddressed because it suggests mortality, illness or other unpleasant life events you'd rather not discuss. But failing to address succession planning "is like getting on a plane with a pilot who hasn't learned how to land the plane," Bryck says. "You really need to sit down and have this difficult discussion."

 

Source : https://www.entrepreneur.com/article/225613

 
A loophole means people are waiting until a death to pass on family businesses
Tuesday, 05 April 2016 15:46

PEOPLE WHO WANT to pass on the family business to their children are unfairly slugged with a higher tax rate if they wait until retirement.

 

The loophole means those that want to avoid a large bill are forced to either make an early decision – or have their families wait until they are dead, according to one of the country's leading tax advisers.

 

PwC director and senior tax manager Colm O'Callaghan told Fora his top advice to successful family business owners was to pass their enterprises on to their children before they hit the age of 66.

 

"Historically, if you were passing on a family business to the next generation, you could get a capital gains tax (CGT) transfer to the next generation and the next generation would get relief from capital acquisitions tax," he said.

 

"But if you're aged 66 or over, you only get the first €3 million CGT free (now), the remaining balance is taxed at the normal rate."

 

O'Callaghan said that there are a variety of reasons why someone may not not be willing or able to pass on their business before the age of 66.

 

"Most people still work well into their late 60s or early 70s," he said.

 

"(Another reason could be) the next generation aren't ready to take over the business or through the recession they weren't able to because banks wouldn't let them or it wasn't the right time. Businesses are now having to wait until the person dies."

 

He added: "Unless they pass the business at the age of 66, it'll be tax inefficient and there's no reason why that should be the case."

 

 

Tax Change

 

The tax system as detailed by O'Callaghan was introduced when the treatment of capital gains was tweaked in the 2012 budget.

 

Capital gains tax is a charge applied to the profit made from the disposal of any asset. It is currently set at a headline rate of 33% in Ireland. Previously, full relief was available to someone aged 55 or over who gifted their business to their child.

 

However, Budget 2012 introduced a clause where this relief only applied from 55 to the age of 66. Once someone is over that age, the relief has a cap of €3 million, after which the normal rate applies.

 

"Most people would say that a business worth more than €3 million is a huge value, but you'd be surprised," O'Callaghan said. "You think of something that might be built up over a few generations, or even one generation.

 

"If it's a relatively successful business employing 20 or 25 people, it could be worth €10 million. If you had a €10 million business and the next day you had a €2 million tax liability, any business would struggle and it may not make it worth their while passing it onto the next generation."

 

O'Callaghan said that although it was difficult to quantify the number of businesses affected, entrepreneurs who built up and sold off their firms were probably in the minority compared to those handing over their operations to the next generation.

 

"There are a huge amount of family businesses in Ireland," he said.

 

O'Callaghan said he was a "happy man" when he spoke to business owners before they hit 66 and the relief should be extended past the retirement age

 

 

 

Source: http://fora.ie/capital-gains-tax-business-2678272-Apr2016/

 
Surviving in a Family Business When You’re Not Part of the Family
Thursday, 31 March 2016 14:48

We see all kinds of office politics – the good, the bad, and the ugly – in family-owned businesses. Families can be intensely political organizations, and non-family executives must know how to play politics both in the business itself and in the dangerous borderland between the business and the family. After reviewing the work that our firm has done with more than 200 business families around the world, we've identified some winning political moves that non-family executives can make:

 

Play in your "room" only. We like to explain to client family and non-family members that family businesses are like a home: Different discussions should be held in different rooms. Non-family executives who survive and thrive are those who either know intuitively or learn through experience how to separate the business into the management room, the owners' room, the family room, and the room for the board of directors. Successful non-family leaders stick to the "management room." They understand that when it comes to the "family room," the family has all the power; it's never going to be a fair fight. Blood is usually thicker than water. Yet family squabbles do spill over into the management room, and non-family executives must be able to isolate the business from the family when family members can't see past their own internal squabbling.

Ironically, it often turns out to be harder for the manager to stay out of the family room than one might think. That's because many business families either deliberately or quite naively try to involve the non-family executive in family affairs. We worked with a client family whose patriarch was continuously trying to engage the very talented non-family CEO in a bitter family fight with his son. This was a losing proposition for the CEO who, to his credit, refused to take sides in family disputes. He was empathetic, but he firmly pushed back against being used as a pawn in a game that he could never win. He repeatedly told the patriarch, "That is a family room issue; please take it there." So far at least, this non-family executive is turning out to be very successful.

 

Be highly discreet and competent. Restricting your influence to the management room does not mean that you are powerless as a non-family executive. Far from it. Given your position in the company, you typically have access to an enormous amount of privileged information, and information is power. As we noted above, the problem for many non-family executives is not that family members try to keep vital information from you, but rather that you are deluged by potentially explosive information. Woe to the manager who cannot keep confidences! Lose the trust of family members and your career will tank no matter how good you may otherwise be at playing the game of office politics.

This is not to say that family members always keep non-family executives informed of important business decisions that are in the offing. They don't. But the best way to avoid being left out of critical conversations is to demonstrate your competence. We've seen this type of situation with another client family where major business decisions get made outside the office when the family gets together on Sunday afternoons. The non-family executives can't force the family to involve them in these extra-office discussions, but in this case at least, one financial analyst is so good that the family invites her to all of these meetings. She has demonstrated her talent, her dedication, her discretion, and her commitment. She works extremely hard and has been careful not to align herself with any one family member or branch. She knows how to be professional in a family environment, and the entire family has come to respect her.

 

Avoid proxy wars. Alignment with one family member or branch is dangerous because families can act out their rivalries by "taking out" a relative's favorite non-family executive. While proxy wars are hardly limited to family businesses, they can often be more intense in families due to volatile group dynamics. For example, we're currently working with a client family member who is very vocal about his intent to break up the team of employees that is fiercely devoted to his sister, with whom he has a particularly contentious relationship. Our advice to non-family executives faced with this dilemma: Never hitch your wagon to just one star. Aligning yourself with a particular sibling or branch is always risky.

 

Give credit and invoke the family's higher angels. In our experience, the non-family executives who survive the longest are those who know instinctively how to deflect credit from themselves to the family. While this is important for career success in all office environments, in family environments this tactic takes on far greater significance. Make a son look important in front of his father – a battle that child may have been waging all his life – and you will win the loyalty of that adult family member for life.

What's more, most family owners are intensely proud of their companies. When negative family politics break out, you can nudge the family members to remember their family's greatness. Do this with genuine respect for the family's legacy, and you can go a long way toward helping them bridge their immediate political differences.

 

Make use of impartial outsiders. Giving feedback to executives about their performance can be tricky in a family business, where the sibling or cousin that you are evaluating may someday be the boss. Your instinct may be to step back and tell the truth, but to tell it "slant." And, indeed, caution is the appropriate response. The fact is that you must deal with the reality of the power dynamics at play. Look for opportunities to make your feedback truly independent of you, and truly confidential. Encourage your business to conduct 360 reviews using an outside provider. Or find an honest broker – for example, a trusted, external board member – who can give constructive criticism without risking his or her career.

One of the most difficult political situations arises when a non-family employee has a genuine grievance against a family member who receives de facto protection because of the lack of any formal (or informal) channels for redressing the situation. Imagine for a moment what happens when a non-family employee with a complaint turns to the head of the business, who just happens to be head of the family and the father of the son who committed some egregious offense. This occurred at one client family where the son was making inappropriate sexual comments to several female employees. In this case, the power of the non-family executive to put an end to the situation was very limited; it took an outside advisor to step in, expose, and stop the harassment.

 

Know your genetic limits. Finally, to be successful in a family business, you must have a realistic sense of the destinations on your career path. Even the most masterful player of office politics is not going to get the top job if there is a family member in the leadership pipeline who is destined to assume the mantle of CEO. Don't take it personally; it's not about you. You are biologically disadvantaged and have to be savvy enough to recognize this fact. Always be thinking about the family tree and family dynamics when considering your own path up the career ladder.

In a family business, playing office politics successfully means having the humility — and the political shrewdness — to put the family first.

 

 

Source:

https://hbr.org/2015/01/surviving-in-a-family-business-when-youre-not-part-of-the-family

 

 
Employment law: How to avoid expensive legal claims when recruiting staff
Thursday, 31 March 2016 14:14

GETTING employment law wrong during the recruitment process can be an expensive game for any business.

 

For example, a successful claim under the legislation by a potential recruit can result in awards of up to €12,697.
But there are ways to avoid the hassle and cost.
The Employment Equality Acts 1998 to 2011 outlaws discrimination in recruitment and selection of potential employees and not just during employment.


Employers must not deny access to employment on the basis of age, race, nationality, civil status, family status, sexual orientation, gender, disability, religious belief and membership of the Traveller Community.
A successful claim under the legislation by a non-employee can result in awards up to €12,697.
And there have been a number of such cases.


For example, an employee was awarded €10,000 by the Equality Tribunal in compensation for being discriminated on the grounds of disability.

 


Use these tips to avoid the pitfalls:

* Ensure the job description and requirements are carefully drafted in any advertisement. They must not be discriminatory or make explicit or implicit reference to the age, gender or any other characteristics of the potential employee.


*If using an application form, a copy should be provided to all candidates. The form should only contain questions relating to the requirements of the position. Questions on marital status, number of children, date of birth, place of birth, medical history or any of the nine grounds listed in the legislation should not be included.


* During interviews, candidates should all be asked the same core questions, to ensure a consistent and fair approach.


* The selection decision and any supporting evidence should be documented, including notes from the interviews. This should include the reasons why the successful candidate was chosen.


* All documentation should be kept for a minimum of 12 months as a claim in certain circumstances can be brought up to 12 months after the date of the alleged discriminatory act.


* Under the Data Protection Acts 1988-2003 an unsuccessful candidate can obtain notes and data in relation to them and the recruitment process. These notes may assist in formulating a claim and therefore an employer should be careful when taking notes.Unsuccessful candidates should be advised they were not selected as soon as possible.

 

* In general, there is no restriction on employers viewing personal information publicly available online in respect of candidates. This information if relating to one of the protected categories under the equality legislation cannot be used as a basis to refuse to employ that candidate. The Data Protection Commissioner has advised that employers should notify candidates that they shall be screened at the recruitment stage, which may involve online searches of the applicant.


* In relation to pre-employment medical exams these should be limited with reference to the exact job description and should not stray into areas which are irrelevant for performing the job description.

 

 


Source: http://www.independent.ie/business/small-business/advice-centre/employment-law-how-to-avoid-expensive-legal-claims-when-recruiting-staff-30252563.html

 
How To Handle Divorce In A Family Business
Wednesday, 30 March 2016 09:52

The marriage didn't work out, but if you're in business with your spouse, figuring out what to do with that vital asset is tricky.

 

Divorce can be a messy situation for almost everyone involved — and adding a family business into the mix certainly doesn't make things any easier, especially when two co-owners part ways.

 

For obvious reasons, divorce isn't always top-of-mind for couples who go into business together. After all, when you're caught up in the excitement of launching your own venture and seeing your hard work come to life, the last thing you want to plan for is the possibility that it might come to an end. But part of starting and owning a successful business is planning for the unexpected, including the major personal and business-related changes that divorce can bring.

 

So how can you navigate the process and make it out the other end with your assets and financial standing intact? There are three methods of handling this situation, but each comes with its own pros and cons. Here's a quick breakdown:

 

Continue to own the business together.

For some people, the thought of co-owning a business with an ex-spouse may not be ideal. But for others, the arrangement can work. If you think that you and your ex-spouse can work well together and continue to run the business, even after the divorce is final, then this may be the best option for you.

 

There are a few pros to continuing to own the business together: for one, you both get to keep your interest in the business, which means neither you nor your spouse has to sell your respective portions. Another benefit to co-ownership is that there's no need for a valuation of the business, which can be an exceptionally expensive process, depending on the unique complexities of your business.

 

On the other hand, taking this route also means that you will need to keep in close contact with your ex-spouse to maintain a good working relationship and trust him or her to do what's best for the business. Co-ownership will not work if you can't maintain an amicable business relationship. If this is not a possibility for you, then you may consider the following options when deciding on the future of your business.

 

Buy out your ex-spouse's half of the business.

Your business is just another asset owned by both of you, so it's going to be treated the same way from a legal and financial perspective. If you're not going to continue sharing the business with your ex-spouse, then it needs to be divided for each of you to get your fair share.

 

To start, you'll need to hire a business appraiser to perform a valuation of your company. As mentioned earlier, this is a costly process, but you can help save money by hiring one appraiser to perform the valuation. That way, you can split the cost of the valuation with your spouse, rather than branching off and hiring separate appraisers to complete the process (which can double the price).

 

After the valuation is complete, you can either buy your ex-spouse's half of the business (or vice versa, depending on your unique situation), or you can use other assets for an even exchange. If both you and your ex-spouse want to stay involved in the business, this situation can be particularly difficult; however, if you are more invested in the business than your ex-spouse (or vice versa), it should be pretty easy for you to determine which of you will buy out the other. If you're the spouse who wants to keep the business, now it's all yours.

 

Unfortunately, keep in mind that you'll also need to accumulate the funds to purchase the other half from your ex, unless you're sacrificing another asset for the business. If you're the spouse who isn't interested in keeping the business, you now have that much more money (or assets) in your pocket, due to your ex-spouse's purchase.

 

Sell the business.

The final option is pretty straightforward: sell the business and split the profit with your ex-spouse. If you choose to go this route, then the two of you should still hire an appraiser to perform a valuation of your business so you can determine an appropriate selling price. Assuming that your business sells quickly, then you will both have money to do whatever you please — you can even use it to start your own business. Unfortunately, if your business is on the market longer than expected, then you're stuck working with your ex for a little more time.

No matter what path you choose when determining your business's future, it's crucial to make sure you hire a team of qualified professionals to help facilitate the process, including an attorney, a CPA and a financial advisor. No matter how well the proceedings go, the emotional and financial effects of divorce can be difficult to manage. By having a trusted team that's working in your best interest, you can move forward with your life and take on your next venture with confidence.

 

Source: http://www.forbes.com/sites/lawrencelight/2016/03/07/when-2-business-owners-divorce-what-to-do/#3e9f1e284c00

 
Handing It Down: The Changing Dynamics Of Family Businesses
Tuesday, 29 March 2016 09:21

Mr Mark Green is a Business Consultant who has worked as a generational interpreter. below are his views on handing the business down to the next generation and how best to do it.

 

With five generations now together in the workforce, generational conflicts are changing the dynamics—and succession plans—of many family-run businesses.

 

This "generational stack-up" creates conflicting work styles and expectations that can make or break a family business, said Mark Green, author of Inside the Multi-Generational Family Business.

 

Close to 80 percent of U.S. businesses and 40 percent of Fortune 500 companies are family-owned, says Green, and they're common in every industry. "It's a huge part of who we are as a country," he said.

 

One of the biggest challenges in a family-run business is the continual change of roles as new generations join the mix.

 

In the past 50 years, the dynamics have become even more complex as family members live and work longer. In the past, family businesses were passed from one generation to another, says Green. "Now they're passed from one generation to many," he added. "The paradigm is shifting."

 

Many family businesses had to change their succession plans during the recession, said Green. In some cases, older generations returned to the business when retirement plans fell apart or to guide the company through a difficult time. In other cases, sons and daughters who chose different careers rejoined the family business when they were downsized or laid off, or because the business needed extra help.

 

As a result, Green's role as a family business consultant is often to be a generational interpreter. For example, he explains to sons that fathers expect them to be at their desks, the first to arrive and the last to leave. Then he explains to fathers that sons are now expected to attend Little League games and can work from mobile devices.

 

In addition, the older GI Generation (1901-1924), Silent Generation (1925-1942) and Baby Boomers all grew up before the Internet, while Generation X and Generation Y have been around technology their whole lives, says Green. That means even simple things like leaving voice mails versus texting can cause big communication issues.

For older family members who may lead a business for 25 years or longer, the role becomes that leader's whole identity, said Green. "It's not just a job, it's a lifestyle," he added. And conflicts arise when the next generation wants a turn to lead.

 

That's why family-run businesses may want to consider creating career tracks for family members, he said. Family firms also need to recognize the patterns and conflicts that exist between generations, as well as how each generation brings value to the table.

 

Family businesses may also want to consider building in time to teach younger family members what it means to be good owners before they leave home, and to create succession plans long before they're needed, Green said.

 

Even with the additional challenges, however, family-run businesses have a lot of benefits, said Green. They typically support their communities, provide jobs, and are stable, value-oriented, and successful. "It's a lot of work, but when it works it's a beautiful thing," he said.

 

Source: http://www.forbes.com/sites/northwesternmutual/2013/09/25/handing-it-down-the-changing-dynamics-of-family-businesses/#7489559667f6

 
8 Things You Should Know About The World's Most Successful Family Businesses
Wednesday, 16 March 2016 11:20

The importance of family businesses to the global economy is undeniable. They account for more than two-thirds of all companies around the world and 50%–80% of employment in most countries. This begs the question, what does it take to cultivate a flourishing family business?

 

EY recently partnered with the Kennesaw State University Cox Family Enterprise Center to survey 525 of the world's largest family businesses. The results revealed that succession planning, integrating women in leadership and achieving staying power are all top of mind for the world's most successful family business leaders. Their achievements support the claim that having a firm grasp of these three pillars is vital to building and maintaining a lasting legacy.

 

As Carrie Hall, EY reflected on these survey results and their work with the world's leading family businesses, these 8 key findings stood out:

 

 

1. 87% of the world's most successful family businesses have clearly identified who is responsible for succession

 

2. 55% of the largest and most successful family businesses believe entrepreneurship is very important when preparing the next generation of leaders

 

3. Outside work experience is not necessarily key to effective family business succession

 

4. Family business succession planning often overlooks the importance of attracting great outside talent

 

5. 70% of the top family businesses are considering a woman for their next CEO

 

6. 55% of the world's largest, longest-lasting family businesses have at least one woman on their board

 

7. The world's leading family businesses average about five women in the C-suite and four women being groomed for top leadership positions

 

8. The world's longest-lasting family businesses maintain a robust entrepreneurial climate

 

 

She is confident that these key findings will remain front and center in the minds of the world's most successful family business leaders in 2016.

 

what do you think family business leaders should focus on to achieve lasting success?We would love to hear feedback. 

 

 

Source: http://www.forbes.com/sites/ey/2016/03/14/8-things-you-should-know-about-the-worlds-most-successful-family-businesses/#6266bbee1cf1

 
Tips for running a successful Family Business
Tuesday, 15 March 2016 11:46

For many family businesses, retaining family ownership and control is a prime objective. However, it may limit growth potential. Passing the business on to the next generation can be very challenging and disruptive. These tips are key to remain successful in your family business: 

 

  • Don't always consider dealing with the family first to ensure business success. The top priority is to ensure that the business is functioning correctly and growing. If you don't take care of the business, the business can't take care of the family.

 

  • Set boundaries to limit business discussions outside working hours. Mixing business, personal and home life can lead to conflict that is detrimental to business success.

 

  • Establish weekly business meetings where personal and family matters are set aside. This helps to focus the attention on the core business objectives. A strict agenda is important in achieving productive meetings. Consideration could be given to inviting a third party, for example the company solicitor or accountant, to facilitate the meeting. If non family members present, ensure they are included and their contributions are given equal weight.

 

  • Don't provide 'sympathy' jobs for family members. It is important that each member of the family adds value to the business and worksat a level that is aligned with their skill base.
  • Define clear management reporting lines in the business and ensure that these are adhered to. I see many instances where family members feel that they can reprimand employees who do not report to them.

 

  • Clearly define each family member's role and put this in writing, such as an employment contract. This should be dealt with like any other business relationship.

 

  • Seek to ensure that family members who are looking to join the business have suitable outside experience first. This helps them to gain valuable knowledge of how business works outside the family business environment and bring new insights and ideas when they join.

 

  • Be open-minded about seeking outside advice. Family businesses at times can be too closed and seeking outside advice can help to bring fresh ideas and facilitate creative thinking. Outside facilitators can also help to make the working relationships of family members more productive. Non-executive directors can provide a fresh view and outlook.

 

  • Treat family members fairly. Family members tend to have an affiliation and affection for the business. This means that they have an energy and enthusiasm for the success of the business that previous generations have spent years building. It is important, though, to ensure that there is no favouritism. Pay levels, progression, expectations, criticism and praise should be even-handed across family and non-family employees. Remember not to set standards higher or lower for family members than for other members of staff.

 

  • Understand the advantages of family ownership and use them as a positive in marketing. Customers are very often drawn to using family businesses because of their culture and togetherness.

 

Careful planning will allow you to identify and address any potential problems in advance. Options include an appropriate shareholders agreement, clauses in the company's articles of association and the use of a family trust to hold shares. Above all, open communication can help the family resolve any issues and ensure that the family business will prosper for many generations.

 

Source:

http://www.smallbusiness.co.uk/running-a-business/business-management/2478377/tips-for-running-a-successful-family-business.thtml

 

 
5 Mistakes To Avoid When Hiring Relatives
Tuesday, 08 March 2016 14:51

It is hard to be objective about hiring relatives, especially a son or daughter. But you have to objectively ascertain people's strengths and weaknesses before you bring them into the family business. Just because your son is getting an MBA in accounting and finance doesn't mean you should appoint him as the CFO when he graduates.

 

Family businesses are a long-established tradition. About 80% of the world's businesses are family owned, according to research from the Kennesaw State University Coles College of Business. Family-run businesses account for nearly 35% of the largest companies in the U.S. (60% of all public companies), including Ford, Wal-Mart, Tyson Foods, L'Oreal, Loews, and Ikea. More than 30% of all family-owned businesses survive into the second generation. But only about 13% are passed onto the third generation.

 

 

Many family business consultants say the primary reason for this low survival rate and why some families don't work well together is the failure to put in place a strategic plan and set of guidelines. Family members can be part owners of the business, but they don't have to work inside the company. As the founder, your objective should be to prep and hire family members because they have a set of skills that the business needs.

 

Running a successful family business doesn't mean running an entitlement program where if you have the right last name you are guaranteed a job and a certain title. A second cousin might be more qualified than the eldest son to lead the company. Many family businesses have folded ultimately because members were brought in by birthright.

 

 

Here are five mistakes to avoid to help you successfully bring family members into the business:

 

1. Operating Without A Family Employee Policy
This is outside of the company's employee handbook. It is important to have crystal clear goals and expectations for family members in the business supported by clear management roles. The family employee policy should spell out what to expect when hiring family members, regardless if they are coming into an entry position or at the executive level. There also needs to be an integration plan for when you bring a family member into the business. There ought to be some form of training and orientation.

 

2. Failing To Define Roles And Responsibilities
The job description for most family businesses is to do whatever it takes. In the early stages of the family business, there is a tendency to have everyone pitching in. You might be meeting with bankers one day and scrubbing toilets the next day. However, there must be written job descriptions, defined roles, rules for compensation, performance reviews, long-term and short-term goals or objectives, so that decisions are not based on family relationships. Also, family members should know if they are not reaching their goals or if they are on the right track for whatever position they are in line for.

 

3. Lacking Formal Programs For Next Generation
You should establish training programs for younger, teenage family members to learn the inner workings of the business. For instance, in addition to giving them opportunities to work in the business after school, create paid summer internships or establish some type of mentoring program. Mentors should also include people from outside of the family. The conventional wisdom is that family members should spend two to five years working at another company in the same industry. Having a family member work outside of the company will help to build up his or her confidence as well as allow that individual to make mistakes on someone else's dime.

 

4. Relying On Post-Graduate Education
Some family business consultants say to be skeptical of traditional post-graduate education, such as MBA schools. The needs of your business are narrow and unique whereas an MBA education is very broad. Meaning, your son or daughter will learn how to work for Fortune 500 companies whereas you are running a manufacturing plant. So, they are spending 90% of their time learning things that won't have any real life application to the family business. Of course, if the job description at your company calls for an MBA or JD then family members can't forgo getting the proper background or credentials.

 

5. Displaying Favoritism or Nepotism
If the work environment is professional and all employees are treated fairly, you won't get accused of nepotism. Set some boundaries between family members and the family business. Also, use your board of directors or a board of advisors to provide objectivity. Another alternative is to hire outside business consultants. Focus on the business and not on the family. Meaning, The needs of the business and not the needs of individual family members should always come first. Research shows that business first focused family businesses tend to create more generational wealth than family first oriented businesses.

 

 

 

If you feel that you do not know how to begin putting these in place in you r business we can help you. 

For more information contact us:

Email:  This e-mail address is being protected from spambots. You need JavaScript enabled to view it  

Tel: 021 4320466

 

 

 

Source: http://www.blackenterprise.com/small-business/5-mistakes-to-avoid-when-hiring-relatives/

 

 
How This Second-Generation Franchisee Is Doing Things Her Way
Monday, 07 March 2016 11:44

A Successful story from a next generation Business:

 

Alex Chambers used to work in her father's UPS store as a student in grad school. Now, she's taken over that store, becoming a second-generation franchise owner. She not only uses the lessons she learned as a UPS employee to pursue her passion of growing the business, but she also utilizes the skills she's gained from her experience as a field hockey coach. Read on to see how she's stepping out of her father's shadow and making the business her own.

 

Q: How long have you owned a franchise?
I'm a second generation franchise owner. My father started the store with a partner in 2003 and I transitioned into ownership about two years ago.

Related: This Man Lost Weight and Found a Career in a Fitness Franchise

 

Q: Why franchising?
It was really appealing to have the opportunity to be self-made, and franchising allows me the independence to develop my own goals and take my business to the next level. At the end of the day, this is my business and it's up to me to succeed. The positive work atmosphere, opportunities to grow and customer interaction are exactly what I was looking for to challenge myself and make a career.

 

Q: What were you doing before you became a franchise owner?
I was in graduate school when I started working at my father's The UPS Store franchise location. However, I quickly realized that owning and operating my own business was my passion.

 

Q: Why did you choose this particular franchise?
My experience working in the store as an employee made me realize that I wanted to be a UPS Store owner. The positive work environment and the opportunities to grow the business were what drew me in. One of the greatest advantages of opening a franchise is the resources that are in place to help new business owners. While working in my father's UPS Store provided me with a foundation for business acumen, The UPS Store training programs took my understanding of business to the next level and gave me the tools to be successful in owning and operating my own store.

It was also really appealing that The UPS Store is a well-known and established brand that I could use as a base for my own business. Plus, I'm a part of a group of franchisees who all network and share best practices with each other. Their advice and knowledge has made a big difference in how I operate and manage my own franchise. It's a really great network.

 

Q: How much would you estimate you spent before you were officially open for business?
I took over the store from my father so I had the benefit of not starting from scratch. Overall, costs to open a franchise start at around $167,000. I'm currently working toward opening a second store and anticipate spending around $1,000 on advertising for the opening month, as well as about $9,000 on store rent and employee hiring. Of course, opening my own store is a priceless experience!

 

Q: Where did you get most of your advice/do most of your research?
My regional manager is a great source for advice and support as well as the other The UPS Store franchisees. In my experience, it's an overwhelmingly positive environment to work within a network of other owners. I regularly meet with other franchise owners in the area to network and discuss ways to help each other's businesses. The energy and drive of the other franchise owners continues to motivate me to be better.

 

Q: What were the most unexpected challenges of opening your franchise?
I think that employee management can be a challenge. In my spare time, I am a field hockey coach and I like to translate my coaching skills into managing my associates. We have a philosophy of "step up, finish, win" that I encourage all of my associates to adopt. It's helped to create a sense of team and camaraderie.

 

Q: What advice do you have for individuals who want to own their own franchise?
It's important to be passionate about your business because, as a franchise owner, the responsibility to succeed lies with you. Stay motivated and continue to learn everything you can about your business and your industry. At the end of the day, it's your business and it's up to you to make it work.

 

Q: What's next for you and your business?

Based on the success I've seen so far with The UPS Store's franchise model, I plan to open several more locations in the future.

 

 

Source: http://www.entrepreneur.com/article/270272

 
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