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Business owners often seek to hold on to their companies up until the eventual sale or family transition in their golden years, yet that often does not happen.
Owners have noble intentions when it comes to the family business. A parent once told me, “All I want is for my children to know we love them equally, so I must find a way to make sure they get equal financial treatment.” The bind these parents feel is quite tight.
- When it comes to a family business, if the parents focus on the money, it will never be fair.
- Children leading the family business want to retain earnings for growth while children outside the business want distributions.
- There is an imbalance and resentments kick in when the children running the company, sacrificing and feeling the pressure of keeping the cash flow machine afloat, are paid the same as those who don’t work as hard or face as much load.
What is a business owner parent to do?
- Understand and honor the individual values and natural strengths of each family member. Children can sometimes feel “not good enough” in a family where building a business is supreme.
- Help each child discover their natural strengths that build to aspirations they can call their own regardless of whether it has anything to do with the business.
- Pull the values and aspirations of the family members into a written family mission statement to build a sort of patriotism for and with the family.
- Educate the family at family meetings about how the business works, how the family economics work, in simple language.
- Look for ways children can participate in the family system, both in and out of the business, such as evaluating charitable requests or coordinating family meetings with professional advisors.
- Celebrate successes with the family and ensure that successes outside the business are equally recognized as those within the business.
Bottom line? Show appreciation for the child regardless of their role as it relates to the business. Show the business the respect it needs to thrive regardless of the children available to participate in it.