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Family Business

Some family businesses are simply companies that employ family members, while others are actually governed by the family.  Which is yours?  Would the rest of your family agree with your answer?  Are you ready to move from the first to the second, but are not sure about the steps involved to accomplish this?

 

Family-owned business leaders frequently indicate that they do not have many sources of support or places to turn to find guidance on the unique issues that arise regarding mixing family with business, and knowing how to continue it for another generation.  We know with certainty that the ownership of your business will transfer, either during your lifetime or upon your death. What is not certain is whether the business will continue, or fail, even though families wield significant influence over potential outcomes.    

Though it isn’t difficult, the key is to start, and where you are today is the best place to begin. While every family is unique, and has an amazing story and history, families are families and many face similar challenges. Having someone with specialized experience, knowledge, and independent thinking can be a valuable partner.

At CJN Advisors, we can help!

What we offer:  Guidance for family-owned businesses to improve or initially establish a governance structure, consider with you the question of who can be an owner, and plan for business continuity.

Governance.  Whether it is time to review an existing family business succession plan that is no longer appropriate, or an event has occurred and you are now ready to begin creating one for the first time, successful families will tell you that sound governance for any family business begins with three pillars:

  1. A strong family committed to continuing the legacy.  The need for unity and a shared vision is essential.

  2. Creation of governing documents.  Many dread this process, but it can be quite enlightening and is an effective path to establishing a structure for governance.

  3. Transparent process for making decisions.  This will be strengthened through practiced, regular communication that allows for all voices to be heard.

 

Transitions.  With sound governance in place, we can begin to focus on the three types of transitions:

  1. The exit, or intentionally deciding to let go.  There are different scenarios, challenges, and commitments to consider.

  2. The transfer of ownership.  This needs to be intentional, and affordable, while the decisions here can sustain – or destroy.

  3. Preparing management, with a timeline.  Having someone prepared, ready, and willing to wait can become complicated.

 

Assessments.  It isn’t always easy to share perceptions about a family business without first providing a safe environment so all can speak freely.  The Family Enterprise Assessment Tool1 (FEAT®) can do this, and provides a snapshot of the current state of the family dynamics and business enterprise.  It was created to serve as a foundation for proactive family governance and legacy planning.  FEAT allows the facilitator to anonymously gather family stakeholder perceptions through the use of an online survey, thereby allowing every voice to be heard – even if geographically dispersed.

 

​As a certified facilitator for processing this assessment and interpreting the results, the service of administering this tool can be included as part of an ongoing engagement, or as a separate, standalone service when preparing for a family meeting. ​FEAT is the first virtual research-based assessment.  It is a simple process, with lasting rewards.  This tool can be used by small families, as well as large, complex families with fully customized alternatives available.

 

 

Other services:  Assisting with needs of family members, and preparing the next generation.

Experts.  As financial resources expand, and families grow and change, the list of area-specific specialists necessary to support your needs will grow.  This team of experts will be critical.  If you don’t have these already identified, we can help make introductions.

 

Plan.  Especially where great wealth has been created or eventually will be inherited, we can help make sense of all the many different issues to consider with your team of professional specialists, including:

  • Estate planning

  • Tax planning

  • Financial planning

  • Insurance

  • Risk management

  • Investment management

  • Philanthropy

 

Organize.  Remaining focused on the family-owned business, we can help with:

  • Business infrastructure and board development

  • Education and engagement for next generation

  • Family meeting planning and coordination

  • Supervision of a family’s team of professional advisors

1The Family Enterprise Assessment Tool was developed by Dennis T. Jaffe, PhD and Caroline Coleman Bailey.

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