An intricate part of the standard “American Dream” is to leave something of substance behind for your kids. The goal is to make leave the upcoming generation better off than the exiting leaders.
One of the best ways to leave your family a source of income is to build a family business. When you have the whole unit working together for a common goal, some very beautiful things can come of those moments.
Consider starting a new family empire, and check out a little information to get you going. Here is a brief look at some of the most important things to remember when starting a new family business.
Make sure you have insurance to cover it all
It’s important to plan for anything and everything. Things go wrong in business, and that is simply a matter of fact. Make sure you are educated in the many different options you have for protecting the family business. For instance, if you are planning on getting the key man life insurance, or intellectual property insurance, be diligent about the companies you choose.
There are several different types of business insurance you will need to research. If there is an accident (whether it be a car accident or someone chopping a digit off) you’ll need to have the necessary financial protect to keep your business from suffering the charges.
Create an in-depth solid business plan
Never attempt to enter into a business agreement with anyone, including your family, without a clearly defined business plan. You’ll need the business plan when you seek out financial investments and loans from outside sources.
A business plan will also give your family direction on the vision of the organization as a whole. Laying out a clear plan of action leaves less room for misinterpretation.
Clearly define necessary boundaries
When you’re working with family, it is easy to blur the lines on just about any subject. You’ll have to do your best to avoid mixing family politics with business, and clearly define the necessary boundaries to keep it professional in the workplace.
Lay out a clear succession plan with everyone involved
Your family should know the plans for the future, so there is never room to argue or debate the flow of responsibility. Let everyone know what the plan for succession in the business is well in advance of your bowing out of the business.
Junior needs to know that he/she is next in line, so they can prepare themselves to manage the responsibility with care and confidence.
Secure financing elsewhere
Don’t pour the family’s security savings into your business. It may be a plan for the future and bring in long-term gains financially, but no business is a sure thing.
Don’t place all of the family’s eggs in one business basket. Find other ways to acquire the necessary funds for your business, and protect what you’ve already built for your family’s future.
