If your family business has achieved any measure of success, you already know that it couldn’t be accomplished without the assistance of one or more trusted business advisors, such as an attorney or a CPA. To ensure continued success for the next generation and beyond, your key advisors should be called upon to work together to help you tackle upcoming challenges.
Your key advisors – the pieces of the puzzle. Your family business advisors likely weren’t hired at the same time, and weren’t introduced to each other at first. Starting a business, many people eventually hire an attorney and an accountant, then may add an insurance agent. Once the business is in full swing, the need for a business advisor may become prevalent. The original impetus to hire each one was likely for a specific need: the attorney helped set up the type of business (e.g., corporation, LLC, partnership), the CPA set up your chart of accounts and handles your taxes, and the insurance agent to obtain the proper coverage for the business.
Fitting the pieces together. Once your family business starts tackling the bigger and inevitable issues – such as succession planning – the need for your advisors to work together becomes more evident. You must have the goals and mission of your family business developed and communicated so that all parties know what their role is in executing the plan. Multi-layered, long-term planning will require many team members to be privy to the same underlying information. Although it may seem a major expense to pay to have multiple professionals attend the same succession planning meeting, having just one advisor attend may end up being costly if all the variables are not addressed properly. Careful, thought-out planning is a common theme throughout successful family businesses.
When the pieces aren’t interlocking. The term “trusted family business advisor” connotes more than just an outside vendor for the firm; it implies there is a closeness, a level of relationship more like family itself. And just like family, there can be jealousy about who is “most trusted.” An advisor who isn’t completely secure in his or her own competency or who doesn’t have faith in the other advisors, may resist sharing the role of “trusted family business advisor” with anyone else. Of course this is not conducive to team-building, but the problem may not emerge until the other team members are in place. Resistance to sharing or openly working with other advisors may be a sign that this professional is not appropriate for your family business. Selecting effective family business advisors from the start (or as replacements) was discussed in more detail in this previous post from April.
Picturing your advisory team – completing the puzzle. You now have what you know to be competent professionals serving all your advisory needs. Up to this point, you as the family business owner may have been functioning as the hub of the wheel and all your advisors as spokes – everyone interacts separately with you but not with each other. It may be time to more formally arrange your advisors into a team. After all, you spend your time running the day-to-day operations and deciding your overall goals – you don’t have time to then oversee all of the outside advisors as well.
An overall specialized family business advisor can work with your other chosen professionals under your guidance – attending important planning meetings, copying each other on their correspondence and progress, while keeping them all informed of the evolving wishes of the family business. As with all aspects of business, setting expectations and providing clear channels of communication will reduce or eliminate unwelcome surprises. When your advisors can focus on doing their “piece” in the puzzle, and not try to force their piece where it doesn’t belong, your family business will be the picture of success.
Contact me at firstname.lastname@example.org or 732.747.0500 with questions about getting your various players on the same advisory team or to receive a complimentary consultation with our family business advisors.