Family Business Planning – Is your family business prepared for the future?
Did I mention that 86 percent of family businesses don’t survive to the third generation? Well yes, I did, in part I of the blog posts in this series exploring family business planning. It bears repeating, but let’s not get bogged down in that statistic. The odds become less daunting when we develop a planning mindset.
“Family business” has a way of infiltrating “the business”, making things more complicated than one where the owners or employees aren’t related. And if planning is important in a business, it’s even more so when family is involved.
Three areas where agreement is important are the business’ mission, vision and values. Of these, mission and vision help you solve strategic issues. Values address how to resolve family dynamics issues.
Mission – The stated purpose of the business
–Our business mission is to become a trusted partner committed to preparing today’s workforce for tomorrow.
Vision – The stated purpose of the business for the family
–Our vision is to continuously improve our sustainable business which will enable us to pass it on to future generations and fund our retirement.
Values – How the family proposes to behave toward its own family members and non-family members
Ideally, you would create agreement across all three areas. But even having agreement in one or two is better than none at all. What if married partners have different ideas about the business’ vision? For example, the wife might be happy to continue developing the business indefinitely, while the husband would like to sell the business and retire.
These considerations are not merely academic for us at Minaya Learning Global Solutions. We started our 2018 strategic planning initiative in October and dedicated that four-hour session to an understanding of what the purpose is for our family business, what our vision is, and, possibly most importantly, we also reconfirmed our values.
During our October session, we made a commitment to visit key clients of ours before our November strategic planning effort, which we did. We had substantive meetings with clients in Boston, Princeton and Philadelphia. We followed that up with a November strategic planning session where we reviewed a SWOT analysis of our firm and compared that with a SWOT analysis on each of our key client relationships.
We assist organizations with their strategic planning, and as a family business, we are dealing with the process ourselves. A SWOT analysis is a good place to start – identify your strengths, weaknesses, opportunities and threats. Then develop objectives for improving the values, mission and vision. Keep these three statements and your SWOT analysis handy so you can refer back to them throughout the year. This will keep your family business on track and help to avoid conflict by defining a clear path forward.
To reiterate, owning and successfully operating a family business is a balancing act, but it doesn’t need to be difficult, or doomed to fail. In order to sustain that business and to ensure its health (and a healthy family dynamic!) for generations to come, strategic planning and mission, vision and value affirmation are essential meetings to schedule throughout the year. Carving out time for strategic planning will not only keep your family business from becoming a number in that daunting statistic we discussed earlier, it will also ensure that there are fewer awkward family moments during the holidays. In regard to business, at least.
We hope this look into the way we construct our Family Business Strategic Plan will inspire you to implement strategic planning into your family business. If all of this sounds like a great idea but you don’t know where or how to start, give us a call. The first step towards making any change is taking the first step.