Can you imagine spending half of your working life in a family business, along side your mother, father, sister and brother, and all getting along?
Many family businesses are able to create an environment of mutual respect and trust; one where everyone functions as a team that shares the emotional and intellectual challenges of business along with its financial rewards.
That said however, how do you successfully change the entire working dynamic when you decide to retire? Who will you promote to your position and how will their siblings react? Needless to say, it can be a tricky situation. One successful mechanism was recently highlighted in CNNMoney. This article llustrates the power of rules .
The article, titled “Family business: How to pass the baton,” is a story about the Mitchell family and the rules they developed to keep their family, as well as their business, intact. As the article illustrates, rules are a way of promising to yourself and future generations that you’ll maintain a strong shareholder’s agreement, operating agreement, or other founding document of the business itself.
So, what guidelines will help keep your family together and in business at the same time? For some practical ideas, consult the original article for the “Mitchell” rules and consider how they might work for your family business.
Reference: CNNMoney (July 9, 2012) “Family business: How to pass the baton”