Family Business or Business Family?
According to Camden Research’s recent report, succession is a greater priority for families than wealth preservation. Of the two, succession is surely the harder to achieve.
While we all push cliches and statistics about the survival of family businesses over three generations, perhaps we should be broadening our perspective? A family operating business is one store of wealth for a family, and one which is capable of employing multiple family members.
Another phrase currently doing the rounds is “business family” – a family whose wealth is well diversified and includes a number of operating assets. Such a family must focus on establishing strong governance for their assets, including rules by which family members can be involved in the operating assets, or draw on the family wealth to start new ventures of their own.
Such a structure, done well, is far more robust from a succession perspective, as it allows children who may not want to join the family business (and this is an increasingly common phenomenon) to do their own thing and still be part of the family asset base.
Consider This: What proportion of your family wealth is tied up in the operating family business? Do your children want to follow in your footsteps? Have you ever asked them? Are your parents pressuring you to follow in their footsteps?
- Succession beats wealth preservation as top priority for families
- How are family businesses in China planning for succession
- Soriano: Is it a family business or a business family?
Here is more on reading on family business succession planning.