Family Business Challenges Addressed by a Business Lawyer
Every business faces challenges, including a changing economy, increased competition, recruitment of the right employees, management issues, and many others. Family-owned businesses are not immune to these problems. As any qualified business lawyer can attest, family businesses have their own set of unique hurdles. By its nature, a family business is not just a business, as emotion, sentiment, and/or memories are often tied up in the business. As such, internal disputes are much more consequential not just for the business but for the overall family dynamics. Therefore, discourse in a family business can be both financially and emotionally devastating for the entire family if not resolved appropriately. It’s imperative to have a trusted business lawyer who can step in and facilitate with a resolution before the conflict escalates into a much bigger pitfall. Having an experienced business attorney who understands your family dynamics in your corner can have a profound impact on the success and growth of a family business. If you find yourself searching for business lawyer with the intention of learning more about the challenges faced by family businesses, read on.
Unique Challenges Faced by Family Businesses
Most family businesses are a product of a family’s passion, knowledge, and hard work. They are fueled by the family’s collaborative desire to provide financial security for generations to come. Some family businesses have been passed down to carry on the legacy of success. To ensure the success of their business, family members must work collaboratively with a mutual goal of growing the business so it can continue to thrive. Many of these businesses started as small and/or side businesses and grew into a thriving enterprises securing a family’s future. However, as a family business grows, the management structure must reflect the changing needs. This is difficult to accomplish especially in a family business. Establishing necessary formalities such as creating a corporate structure and developing regulations for ensuring standards of practice are essential for continued growth. However close family relationships and dynamics may become a barrier to this process. A trusted business attorney with experience in addressing family dynamics is invaluable to this process. The proper legal guidance will alleviate many disputes and avoid family discourse in the future.
Succession Planning Challenges
Illness, disability, death, divorce, retirement, and internal family disputes can derail a business quickly. A long-term succession plan is essential for a family business to mitigate the impact when these issues arise. It’s important to develop a plan which formalizes the future leadership and structure of the business. A formal succession plan offers transparency and avoids surprises and panic, thus ensuring a smooth and productive transition of management and control of the business when the time comes.
Lack of Employment Policies
Doing what’s best for the family may not always be what’s best for the Business. For this reason, the separation of roles within the business is important but very challenging to establish. To ensure the success of the business, it’s important to create specific roles through written agreements and contracts between all family members involved in the daily operations of the business. Although they are family to you, they are employees of the Business and must be treated as such. Properly structured partnership and employment agreements are an essential part of every family business and will serve the Business well.
How Can a Professional Business Lawyer in Howard County MD Help You?
Handling the unique dynamics of a family business takes very careful navigation. All family members involved have individual needs which may fall into conflict within the family dynamics at any given time. However, a trusted business lawyer can help to establish boundaries, facilitate with communication, and develop a tailor-made succession plan to ensure that th