Tips on How to Create a Dysfunctional Family Business Environment - Part 2
Continuing the humorous theme of how to create a dysfunctional family business, part two continues below with the remaining 5 tasks to ensure you succeed.
Always tell your non-family employees that there are two sets of policies and procedures – one for family and one for everyone else. That works wonders too! When your children show up for work at 11 and leave at 230, everyone will know they are concerned for the business, reaching their goals and actually earning their bonus checks. This also has an added bonus – it helps attract otherwise hard-to-find talent that will stay there for more than 9 months. The benefits a business derives from loyal, committed, idea-generating, highly sought after and experienced non-family managers are overestimated.
Suppose you do have a child in the business that actually does work harder than you, has helped increase revenues by 400% over the last 9 years and has put systems in place to allow you more free time…well, never discuss selling the business to him. Certainly not is it’s your daughter…and especially if she has an MBA! Everyone knows that sons have much higher business acumen. If you’ve already made the mistake of talking about selling the business to your son, drop hints that the transition plan is in place…but never really commit. Next, consider all the joyful discussions and the excitement that will bound when your in-business children learn that upon your death and in the spirit of fairness, you have left an equal number of shares to all the children. There is nothing like brothers and sisters becoming instant business partners, especially when one is married to a lawyer and the other child is a lazy slob that simply wants to cash out! Remember to keep your real business succession plan a secret – surprises are what make families strong.
Insist on the idea and engrain in all of your children that your business is not about making money and never has been. It is about “staying in business”… at any cost. The older the business, the better. Old is good, right? You can make this point by talking about how bankers will always lend money to an old family business to support its growth. Conveniently forget stories of buggy whips, slide rules and other ancient business models.
Oh this one is good. Concentrate all your wealth in your business, and keep it there….especially if you are nearing retirement, say in your late 50’s or early 60s. It’s a perfect plan. As every smart businessperson knows, reinvest every single penny back in your business year after year, never diversifying. Then…wait for it…tell your children that this is the full extent of your retirement plan. No pressure there. Also tell your children that when you die, their mother will inherit the business and that she will need all of their help running it. If all goes as planned for…not really…the business will fail and everyone will gather round at Thanksgiving and recall what a great businessman you were. After all, obviously you were the only you that could run it profitably.
Lastly, forget estate plans. They only enrich your attorney, CPA and other advisors. Phooey! Some of the most memorable family moments come when everyone testifies in court and offers his or her own version of what you really wanted. Denying your children the chance to prove their survival instincts and persuasion skills is not fair, is it? Additionally, think about the educational experience your children gain from sifting through your hodge-podge of disorganized personal papers and battling in open court – all on public record for anyone to read about and observe. If for some reason you have been convinced and are adamant about having an estate plan, do not get professional help. Online, do-it-yourself kits are good enough and will likely be adequate enough to handle your unique situation. After all, everyone is basically the same. Besides, it will only take about 15 minutes. Remember though, that is 15 minutes of your life you’ll never get back….so be sure it is really worth your efforts. Life is short.