Family business are a big part of NZ business. With MBIE stating they make up around 75% of entities and employing a ‘good chunk’ of the workforce. I’ve worked with my fair share over the past 20+ years as a CA.
There is a uniqueness of family business to survive where a typical business commercial model may not. It’s that strength to help out and pitch in during the hard times that make FOMB’s quite special. Dedication from family members can be hard to replace.
Long drawn out debates about business decisions can at times become heated, however the family bond creates a connection that usually brings the family back together. Once heads cool that ongoing discussion is again a strength for FOMB’s. At the end of the day, while the family may not all agree on a particular business aspect, everyone will still want to clear the air and sit down for family Christmas dinner together.
One of my key takeaways for the FOMB is to have clear expectations about who does what, who makes the calls and who is responsible. A business plan for any business is a good tool but having a clearly defined one for a FOMB is a good way to head off difficulties.
Working with FOMB
I like to keep a good understanding of what’s going in my clients business, we use Xero so we have good up to date reports, I check and file my clients GST to ‘Keep my head in the game” and charge a fixed price fee so they don’t worry about calling me with a question. Regular development meetings lets me play a part in keeping their business moving in the right direction.
Like any business things are always changing. Effecting the hand over from one generation to the next is a big decision. From experience this takes quiet some time and generally if you start early enough there should not be any panic. Start with identifying everyone’s key strengths and weaknesses. What are each family members views? How would they like to be included? Then it’s a matter of trying to fit the jigsaw together. Not everyone is going to get what they want and that’s part of managing the family dynamics.
Family owned managed business can be hard work, but also a lot of fun, plus you get to share it all with those you love.