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 By Johnathan Fahr

As we all know family companies are the key and backbone of our economy, as growing up in a family business and continue to work in one the business has different genetics at play than non family businesses, this is especially the case in family farms and remote businesses or in many First Nations communities where the family lives and works together.

Most family corporations have one person that is the Founder/CEO that is getting on in years and I get asked these questions from people all the time; Will the company stay in business, Where do the family assets go, Who is going to be in charge, Does his/her spouse get control?

When planning for succession and the future growth of your family company you need to first address is there a problem, if there’s not don’t try to fix something that’s not broken. But look into the depths of the family and the company.

If you are finding that there are unanswered questions then you should do something now as the later you push it the more difficult things become. I have seen it before that family businesses and families break up and never speak to each other again if there is no succession plan in place.

Ready To Move – One tool to use is to create an non family board  the non family board is going to be your non biased advisors, and most of all you are creating stronger succession this usually doesn’t happen until the founder starts to become fragile, but the sooner you bring this in the better. Start small 1 outsider and 1 family member.  

This board would be an advisory team that would not be liable nor any legal obligations and keeps the family in ultimate control, but lets you dip into a pool of people with knowledge outside the family and the business. When selecting this board look for people that you need, maybe you are expanding to a different product or location, get someone that knows the area you’re moving into or the new product line you want to start.

The outside board will make your family company more creditable in the industry, but the family needs to value and respect this advisory group, and also keep them up to date with the current industry you operate in so they better understand things.

There are other tools you can do to make your family company more stable such as creating a family trust to create even more transparency, some of the family will be hesitant but needs to see you are doing this for the better of the business. Dealing with someone that is hesitant you can also add that an advisory group will be there for the long term and does not have any financial benefit other than getting paid for meetings.

Now people might think that their company is too small for an advisory board, or their assets/net worth is not that of large family run corporations. But at the end of the day your family and your business is what you have, why would you want to risk losing it. 

The Fahr Group is committed to work with family businesses.

Author: Johnathan Fahr, for more information please email info@fahrgroup.ca or visit  http://www.fahrgroup.ca/

© 2009