What’s the Most Important Action a Family Business Can Take?

Well-known family business consultant Henry Hutcheson recently offered his list of what he considers his top pointers and solutions for those running family businesses. They include:

• The most important action a family business can take: installing appropriate governance. That means having a board of advisers with some members who are not family or friends. Pay should be based on position and contribution.
• The approach with the highest correlation to a successful succession is having the next generation spend some time working outside the family business. The next best is working for someone other than the owner.
• Good communication is the key to a healthy family business and mitigating conflict. Regular family meetings are essential for good communication.
• Siblings work together longer than child and parent. Their success depends on three things: defining roles and responsibilities; having open, honest, and frequent communication; and defining the money, benefits, and separation parameters.
• Family members who do not work in the business can have a major impact on the future of the company. Don’t ignore them.

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If you would like to share your wisdom or your company success story with other family business owners, please let us know. We may feature your comments in an upcoming Family Business News. Contact Phillip Montgomery (phillip.montgoemry@ cbia.com or 860.244.1982).