Our Business Consulting advisors answer a recent question one of them received, below:
Question: We have a family business. What is the best way for different generations to communicate, plan, and participate?
Answer: These are important conversations for families to have. We often advise our clients to take a two-step approach.
Step 1: Family meeting
A family meeting can provide a productive setting for these kinds of conversations. Different generations and individual members will have unique needs, concerns, and topics they will want to address.
In our experience, parents often want to engage with their children about generosity, leadership, and ownership planning. Children will need to feel free to express their honest wishes, participating in the conversation as equals, even if they don’t currently have an official vote in the business. Such a conversation is often best facilitated by an objective third party.
Step 2: Family constitution
A family constitution helps to avoid unintended consequences and conflicts, both inside and outside of the business. For example, children often have different needs and wishes in terms of their involvement in the business. One may want to lead the business; another may want to use her share to fund her nonprofit work. We counsel parents not to presume, but to “love equally and treat uniquely.” Our goal is to ask the right questions during this process so all parties communicate openly, equipping parents to treat each child as an individual.
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