Pruning The Family Buusiness TreeOne of my favorite stories about Yankee catcher Yogi Berra is one about him going into a pizza shop and ordering a pizza to go. The proprietor asked Yogi if he would like pizza pie cut into 6 or 8 slices. Yogi replied 6 because he was not that hungry!
Families grow faster than business
For many family businesses, families grow faster than business. Their business is like a pie that is being cut into smaller and smaller pieces. This can end up with more family members in business than what business can afford to employ. Often this creates a situation where none of family members are making a decent living; or where, because of a lack of re-investment (machinery, trucks, computers, etc) in business, business loses its competitive advantage in market place.
Hiring strategies for family members
To avoid this problem, we recommend that family businesses develop hiring strategies for family members so that only those family members who acquire a skill or expertise that business needs are invited to join business.
Kemba Dunham, a writer for Wall Street Journal, said she could understand strategies for family members in business, but what about other family members. She posed a very interesting question to me – "What can non-employee family members contribute to family business?"
GREAT QUESTION! We went on to discuss two very successful strategies we have used with our family business clients.
Create a family foundation
One great idea is to create a Family Foundation (FF). This is a wonderful platform to accomplish many different goals.