A Flexible Response to Unanswered Questions
Dear Advisor: Our business is good. Our children are in their teens and early 20s. We would like to make plans but can’t yet know the disposition of our next generation. How can we proceed?
Yours is not an unusual dilemma. With four children who are passionate about their independence and proudly pursuing varied interests, a successful family business we know faced a situation similar to yours in a very creative fashion. Would the children enter the business? Could they work together as a team? Are they all interested in ownership? Might one or more wish to start his or her own business?
Because the answers to these questions were unclear, the business’ founders designed tremendous flexibility into their substantial business to prepare for any eventuality.
They sold the real estate under one of their businesses to raise cash.
They also began preparing the company to go public, should that become appropriate, and started a small venture capital firm to gain experience in case one or more of the kids want to start their own businesses. They also began to prepare themselves as a family. They initiated family meetings. They developed a method for making decisions by consensus and began practicing through smaller family decisions. They worked on their family communication skills.
With family uncertainty, they built flexibility into the business to be able to accommodate various eventual family plans. In the meantime, they are working to strengthen the family which, if nothing else, will make owning the summer home together more pleasant!
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