Is it your busineess or the family's business?
Own what you possess.
Only 15% of family enterprises reach the third generation of the family that founded them. The biggest reason for this is not — as one might think — a lucrative sale. Rather, it is a profound lack of planning and failure to cultivate a spirit of engaged ownership among family members.
In one famous example, the Bancrofts, long-time owners of Dow Jones, found themselves virtually forced to sell their enterprise to Rupert Murdoch. The purchase price was reported at between $3.5B and $5B; however, Warren Buffet remarked that the company could have been worth $50B if only the Bancrofts had been more active owners.
Many of us do not fully grasp the distinction between the science of management and the art of ownership.
Like all careers, management is a calling and only those who are passionately committed should enter it. Being an owner is a bit subtler; it requires involvement as a dynamic steward, stakeholder and conservator. Ownership demands clearly articulated vision that management can act on.
Family businesses need to actively educate all stakeholders – including those who marry into the family — about the significance of ownership. If a business remains “Mom and Dad’s company,” it is unlikely to thrive under future generations. Also, businesses by their nature must take risks, but the risk has to be balanced. Too much risk leads to chaos, too little leads to inertia; both states can ultimately result in failure.
Sage360 Advisors is engaged by family businesses when they:
We start with a confidential assessment process, digging deep into the knowledge and experience of each family member and management team member, as well as some customers. Through a series of monthly meetings we work through issues and take action, putting the business on a firmer footing and engaging all family stakeholders in the art of ownership.
Along the way we bring together other trusted advisors to deal with the financial elements — and ensure that the family is able to keep what it has worked to build.
If the question of “what’s next” for your family business is weighing on you...
Sage360 Advisors can help you achieve clarity, gain buy-in and develop a cohesive plan that management can follow — and that you can monitor. Contact us.
In one famous example, the Bancrofts, long-time owners of Dow Jones, found themselves virtually forced to sell their enterprise to Rupert Murdoch. The purchase price was reported at between $3.5B and $5B; however, Warren Buffet remarked that the company could have been worth $50B if only the Bancrofts had been more active owners.
Many of us do not fully grasp the distinction between the science of management and the art of ownership.
Like all careers, management is a calling and only those who are passionately committed should enter it. Being an owner is a bit subtler; it requires involvement as a dynamic steward, stakeholder and conservator. Ownership demands clearly articulated vision that management can act on.
Family businesses need to actively educate all stakeholders – including those who marry into the family — about the significance of ownership. If a business remains “Mom and Dad’s company,” it is unlikely to thrive under future generations. Also, businesses by their nature must take risks, but the risk has to be balanced. Too much risk leads to chaos, too little leads to inertia; both states can ultimately result in failure.
Sage360 Advisors is engaged by family businesses when they:
- Are struggling with their succession plans.
- Cannot come to agreement on who should lead the company.
- Find themselves in crisis and are considering drastic action — such as selling — because they cannot resolve it.
We start with a confidential assessment process, digging deep into the knowledge and experience of each family member and management team member, as well as some customers. Through a series of monthly meetings we work through issues and take action, putting the business on a firmer footing and engaging all family stakeholders in the art of ownership.
Along the way we bring together other trusted advisors to deal with the financial elements — and ensure that the family is able to keep what it has worked to build.
If the question of “what’s next” for your family business is weighing on you...
Sage360 Advisors can help you achieve clarity, gain buy-in and develop a cohesive plan that management can follow — and that you can monitor. Contact us.
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Less than 30% of family businesses have succession plans; less than 40% have a successor in line and preparing for transition.
LNT: Laird Norton Tyee Family Business Survey: Family to Family 2007.