• Invest in employee education, including training related to people skills and communication.
• Be careful what roles you give your family members. What happens when your relative keeps the company’s books? To outside observers, including potential buyers of your business, this can create misperceptions and concerns. It’s always smart to have outside accountants review or audit your books.
• Over-communicate. Family dynamics can infuse unnecessary emotional drama. Maintaining clear, open communications channels can help neutralize touchy situations.
• Develop succession plans. Data from peakfamilybusiness.com show that only 30 percent of U.S. family businesses will successfully pass the reins to the next generation, despite the fact that approximately 70 percent of those surveyed said they would like the business to stay in the family. Almost half of the U.S. companies surveyed had no succession plans and, by the third generation, only 12 percent are still viable. It’s critical to work with experts, such as attorneys, coaches and investment bankers, to develop customized succession plans. Don’t wait until a crisis strikes – by that time, it’s usually too late. I’ve seen too many families end up in court fighting over things that could have been discussed amicably in advance.
• Show your love. Although you should forget family ties when you’re working, you should take time out of the office to nurture your family.
For family businesses, it’s important to be realistic about the potential challenges and put in place the right systems to mitigate them. A little planning now can go a long way toward ensuring long-term success – and happy family relations for all.
James Cassel is co-founder and chairman of Cassel Salpeter & Co., LLC, an investment-banking firm with headquarters in Miami that works with middle-market companies. www.casselsalpeter.com