{"id":19561,"date":"2020-07-01T10:19:49","date_gmt":"2020-07-01T09:19:49","guid":{"rendered":"https:\/\/bigredcloud.com\/?p=19561"},"modified":"2023-10-02T13:00:43","modified_gmt":"2023-10-02T12:00:43","slug":"running-in-the-family","status":"publish","type":"post","link":"https:\/\/bigredcloud.com\/en\/running-in-the-family\/","title":{"rendered":"The Key Steps in Creating a Thriving Family Business"},"content":{"rendered":"

Running in the family<\/b><\/p>\n

Helping your children understand the financial aspects of your business is a great starting point for creating an enterprise that is capable of lasting into the next generation and beyond.<\/span><\/p>\n

Most cultures have a variation of the expression \u2018shirtsleeves to shirtsleeves in three generations\u2019, meaning the first generation creates the wealth from nothing, the second generation spends it and the third generation ends up with nothing.<\/span><\/p>\n

Many of you will want to create something you can pass on to your children. But <\/span>research suggests<\/span><\/a> less than a third of family businesses make it through the second generation and only one in eight make it to the end of the third generation.<\/span><\/p>\n

Yet there is also plenty of research to suggest <\/span>family-owned businesses are more successful than their non-family competitors<\/span>. So what are the key steps in creating a business that can survive and thrive after you have handed over the reins?<\/span><\/p>\n

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Kids, we need to talk<\/b><\/p>\n

The first thing to do is find out whether your kids actually want to get involved.\u00a0 Encouraging them to ask questions about the business from an early age will make them feel part of it and help you all figure out whether it is what they really want to do.<\/span><\/p>\n

If they are enthusiastic, work experience is a good way of learning the ropes. Don\u2019t show them any favouritism or work them harder than anyone else – give them a range of tasks and measure their performance objectively.<\/span><\/p>\n

As they get older they may benefit from working outside the family business to broaden their knowledge and develop leadership skills.<\/span><\/p>\n

Planning ahead is vital. Children with entrepreneurial skills and ambition will not hang around for ever while you decide when you want to hand over control, so a clear succession plan will help everyone understand when the transition will take place.<\/span><\/p>\n

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Why are you doing this?<\/b><\/p>\n

A family business \u2018constitution\u2019 will help you decide what kind of enterprise you want to be and help answer questions such as:<\/span><\/p>\n