Forward Thinking Business Blog –
Like any other business, family businesses become more complex as they develop and grow. This is particularly true as more people are brought into the business, regardless of whether they are family members or other individuals recruited to meet specific business needs. Wherever people work together, conflict can arise due to differing expectations and standards of behaviour, inter-generational tensions, conflicting objectives, inequities in responsibility, performance management, remuneration, and so on.
A well thought out and effectively communicated family business agreement can help overcome these problems giving you more time to focus on your core business.
So, what is a family business agreement?
Essentially, a family business agreement is a roadmap for the successful transition of the family business to the next generation. It sets out the plan for the business and the skills required to ensure the next generation is adequately equipped for the successful succession of the business. It is based on family trust, mutual respect and the mantra “If you look after the business, the business will look after the family.”