Upfront on family business

By ELLEN READ

Succession is one of the most difficult problems for family and owner-managed businesses.

What if everyone wants to take over the business? How should it be divided?

What if no one does? Should it be sold?

American family business consultant James Bieneman addressed these issues this week for at an Auckland seminar organised by chartered accountants Horwath Porter Wigglesworth and attended by more than 130 people.

First, said Mr Bieneman, it was crucial to plan and communicate openly.

"Preventive things are best because then you can be upfront and clear about what is going to happen," he said.

Regular family meetings, facilitated by an outsider, were a good way to do this.

"The ground rule is that people talk about what they want and you must have a pre-circulated agenda," said Mr Bieneman.

About 70 per cent of United States gross national product and employment were created by privately owned companies, he said.

In New Zealand, the percentage was even higher. It was therefore vital to economic well-being to create processes for such companies and to help them run.

Mr Bieneman said the process had four parts - planning for the senior generation, the family, the company and success - and two dimensions - the hard (or economic) and the soft (or family).

Addressing and integrating all those was the key to successful business management, he said.

Mr Bieneman has for many years been a family business consultant working with privately owned companies and business owners on succession, wealth transfer and family.