Business planning: Does it also address family issues?

Is your business a personal dream to work for yourself?

Do you plan to find a buyer for your business and retire on the sales proceeds?

Or are you training a successor to carry the business into the future?

business owner

Whatever your dream, you need to develop an overall strategy to ensure that your business prospers and meets your family’s needs.

Planning is key. Failure to plan will adversely affect both your business and your family.

Experienced family business consultants can provide you with comprehensive planning assistance and a broad range of advisory services specifically developed for the unique requirements of the family business.

How can I balance family and business?

The challenge for any family business owner is balancing business demands with family concerns. The balance can be achieved through total family business planning.

Most family businesses lack written strategic plans. Companies with strategic business plans are also inclined to undertake other types of planning – financial, tax, succession, retirement and estate.

These plans are essential for your business success but also shape your family’s current and future circumstances.

What is total family business planning?

Family business planning actually involves four plans:

The owner’s plan addresses the owner’s role in the family business now and in the future. It outlines the owner’s personal, company and family goals. The plan also covers financial security issues and details the owner’s exit strategy.

The family’s plan is focused on the mission of the family business, fairness to all family members and owners, leadership and governance, and the rights and duties of the owners and family members.

The company’s plan identifies the company’s strengths, weaknesses, challenges and opportunities and provides guidance to promote the health of the business. The company’s plan is developed to harmonize with the owner’s and the family’s plans.

The succession plan facilitates the transfer of wealth, ownership and leadership to the next generation. Since they can influence one another, all four plans must be considered together. To help the family business accomplish these objectives, most CPA firms provide services that address both soft-side and hard-side issues involved in family business planning.

What are soft-side issues?

Soft-side services deal with the interpersonal and emotional issues of running a company. How a business owner handles these issues often determines the success or failure of a family business. On the soft side, your CPA can help you identify, address and resolve potential problems. Soft-side issues include:

  • Family business mission statement
  • Goal setting and clarification
  • Performance standards development
  • Compensation structures
  • Shareholder agreements
  • Business roles and job descriptions
  • Employment rules
  • Communication counseling
  • Governance
  • Conflict management
  • Leadership transition and succession

What are hard-side issues?

Hard-side services refer to what are often considered traditional CPA services. They primarily deal with financial and tax matters. Under the hard-side category, services provided by CPAs include:

  • Business and personal income tax planning
  • Estate and gift tax planning
  • Investment portfolio management
  • Wealth accumulation, preservation and transfer
  • Retirement planning
  • Cash-flow improvement
  • Business profitability consulting
  • Business valuations and structures
  • Mergers and acquisitions
  • Insurance reviews

Your CPA can help you find the balance between meeting the challenges of managing your family business successfully and enjoying your personal and family life.