Working In A Family Business – How To Avoid Conflict

by Neal Frankle, CFP ®

Working in a family business isn’t easy.  Of course you have to be concerned about the financial health of the firm.  But at the same time you have to balance feelings and relationships. On top of that, you have to be concerned about complicated continuation plans. And it can be a nightmare if try to sell your family business without having all he owners on board. It’s enough to make your head spin.

Fortunately there are plenty of free (and almost free) resources at your disposal.  The key is to get objective third-party input that most of the family members will respect and accept.  Here are 5 resources that might just fit the bill:

1. Your CPA

Your current CPA knows more about your business than just about anyone else — and you’re already sending her a check every year anyway. She should be more than happy to be of service and you won’t have to spend time and money bringing her up to speed. If for some reason your current CPA is not qualified to provide business advice, find a CPA who is and start working with her instead.  You want a professional who really understands what your business is worth and how it works.

If you hire an family business consulting firm, they are just going to bring on an outside CPA and you’re going to have to pay for the time it takes him to become familiar with your operations.  Why not start grooming your existing CPA to provide the same job anyway?

2. Your Attorney

Same argument as above. Use your existing attorney for general business advice.  I had to go through a number of attorneys until I found a few that are really wonderful business resources.  This has made all the difference.  I suggest you follow my lead.  No matter how much you like your current lawyer, if he or she can’t provide you with strong business ideas, find someone else to work with.

3. Your Clients

If your issue is marketing, why not talk to your clients? Ask them about their needs and how you can better serve them. Put a few lunches together and invite people who will be frank and sincere. They’ll point you in the right direction much faster than a consultant.

4. A Shrink

This one might sound a little off the wall, but it might be the most important step you could take. Often family business decisions are made in the interests of the family and at the expense of the business. In reality, such decisions hurt everyone in the family.  Rather than try to ramrod a decision that’s sure to isolate and alienate others  (or make a bad decision in order to keep everyone happy) call in a therapist to mediate. She might help everyone come to a much better decision.

5. Yourself

You might be the best peace keeper there is in the business.  It depends on your relationships with the other family members.  Do the research and bring it to everyone before you hire a consultant. You’d be surprised what you can do for yourself and your business at no charge. (Read “Advertising Your Business For Free” for an example.)

When you have a family business, you are going to be faced with a variety of challenges. Pick the best resource to deal with the specific problem and you’ll get a better solution quicker than you probably would by hiring a consultant.  An added benefit of course is that you’ll save a ton of dough. Just remember that you don’t need to find one person who will solve all your problems. That person doesn’t exist.

Do you own a family business? Have you turned to a consultant? What were the results? What other tools have you used resolve issues in the business? Do you think there is a place for a family business consultant in your situation? Why?

 

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{ 5 comments… read them below or add one }

Money Reasons September 25, 2010 at 4:43 AM

Thanks for the mention!

Another great site to link to in my “MR Cache” review post coming this Sunday :)

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Tom @ Canadian Finance Blog September 24, 2010 at 5:50 PM

Thanks for the mention Neal!

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danielle September 24, 2010 at 8:40 AM

thanks for linking to our guest post “Preparing For Your Peak Income Years” :) great list, Neal!

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Kevin@InvestItWisely September 24, 2010 at 5:32 AM

Thanks for the linkup, Neal!

P.S. I had to remove my URL for my comment to go through. The other one is in spam. :(

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Kevin@InvestItWisely September 24, 2010 at 5:32 AM

Thanks for the linkup, Neal!

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