Every family business is unique and each requires solutions to the challenges they face that are tailored for their individual needs. However, the two most common concerns family owned businesses share are those of wealth preservation and succession. Difficulties encountered here are almost always attributable to a failure to plan for the future armed with the right information to do so.
To pass on a business to the next generation, it needs to be in good financial shape. It needs to have been run profitably and with sufficient cash reserves to give the new generation a fighting chance.
This will require a wealth management strategy including a succession plan that all parties can sign up to and a thorough understanding of the assets the business owns that form the basis of its wealth.
The protection of family wealth does not lie with one generation and an active role may be needed by members of each generation. This will require a clear understanding of the values and the wealth management goals that family members want to achieve.
Early planning is paramount. The identification of a successor and the lifetime handing over of a business can be difficult. Often there is a need to ensure the managing generation has enough accessible wealth to secure their future financial stability without placing hardship on the incoming generation.
Family business consultants often employ an analytical approach focussing on tax planning, consolidated reporting, risk and due diligence and asset management issues. These are important areas but must be aligned with an understanding of the family dynamic, the emotional make-up of a family business – what makes it tick, what keeps it together, what keeps it successful, what intergenerational differences exist in terms of motivation and aspiration, where is it heading in the future?
Family Business Connect is our new 360 degree business review service which examines all those relevant factors and more, the design is based on a house, with a room for each key element. Working with you we will guide you through it, helping you to properly plan and unlock your businesses full potential. Please contact your local office of Family Business Connect advisers for support.