Every company balances the pros and cons of making educated choices. However, with a family business, risk can cause you to gamble away more than you anticipated. Failure always stings, but it hurts even more when your loved ones are affected. Unfortunately, not every owner thinks beyond the monetary amount before taking a risk.
Our family business consulting firm has seen what happens when you aren’t aware of every expense. Positively People can help you benefit your bottom line and your relatives with professional guidance. Read on to learn more.
Understand When You Risk Your Relationships for Profits
The stress of running a family business can sometimes blind us to what’s important. That can include negatively affecting the relationships you have with relatives. Both extended family and immediate loved ones can suffer from being a “workaholic.” Others may become disinterested by being excluded from daily operations and decision making.
A family governance board can help ensure that your choices reflect everyone’s shared values. Otherwise, you could eventually see the trust between both sides erode.
Know When to Include Relatives in Continuity Planning
Many firms struggle with finding where non-business relatives fit into the organization. Some seek guidance on matters they don’t understand or never include them. Knowing which responsibilities they share eliminates confusion and overlapping roles. Everyone becomes accountable for specific items, causing them to all be involved somehow.
Even if they carry no real power, non-business family members can still be beneficial. Don’t discount anyone that is involved in some way and look for hidden talents amongst them.
Quantify Family Business Risks for Improved Focus
When others hear concerns, some only see it as a challenge to prove themselves. Unfortunately, that can mean heading for disaster out of ego. Quantifying risks beyond them posing a threat can help others take them seriously. That can include how choices impact performance, profits, or even your brand’s reputation.
Seeing these dangers objectively prevents them from being scoffed at by directors. Find tangible ways you can quantify risks and you’ll get better decisions being made.
What Should Family Business Risk Include, and What Will You Lose?
When choosing to face a risk head-on, what will you give up? Will it cost you money, credit score points, or peace of mind? One significant loss can drive a wedge between family members for years. Others may resent having to stay connected to the company after it fails.
Before gambling anything, reconsider what it is you are putting at risk. It may prevent a disastrous decision from being made by ambitious owners.
Minimize Your Family Business Risk with Professional Advisors
One way that we can offer family business advisory services is by analyzing the risk. We provide an independent and objective view of your finances, performance, and other metrics to help guide you. Too often, relatives either have too much input or not enough.
We ensure everyone has a voice in family business succession planning. Whether your firm is new or multi-generational, we can assist you the best. We work with many unique brands across several industries with personalized solutions.
You don’t need to gamble more than you feel comfortable losing. Make better operational decisions with Positively People’s advisors and contact us today.
Learn more about Positively People’s Services in family business consulting.