50 Common Causes of Family Business Conflict ... and how to deal with them

Audio No 36: Personal Financial Security

• Financial security tends to become a more serious issue as people get older and have less capacity to adapt and overcome financial challenges.

• Fear is always a major motivator and financial security, or the lack of it, is an easy thing to get bent out of shape over.

• Ages and stages: as older family members start looking towards retirement, or at least lower income generating capacity, they become more concerned about preserving money and transferring it out of the business into personal savings, or alternative investments.

• Meanwhile, younger family members have much longer time horizons, and more immediate funding needs.

• Owners cannot responsibly hand over the keys of the kingdom until they feel safe and secure.

Solution:

• Recognise and respect that “personal arrangements” can conflict with “business arrangements” when immediate needs clash with longer timeframes.

• Develop and agree a financial plan for outgoing family members that eliminates business liabilities.

• Consider vendor terms purchase arrangements for business interests if there are no other options.

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#succession #business #conflict