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Key Ideas Newsletter . November . 2003 

 
Key Ideas for Family Businesses
Brought to You by Jane Hilburt-Davis & Key Resources

Did you know what two competencies have the most to do with longevity and success in family owned businesses? Well, if you guessed strategic planning as one of them, you're correct.

In this issue of Key Ideas, we'll discuss the importance of strategic planning, and how to create an effective plan for your business. In coming issues, we'll discuss other key factors for family business success, so stay tuned!

In this issue…

  • Strategic Planning for Family Businesses
  • January Breakfast Meeting
  • Family Businesses Facts
  • Question of the Month


Strategic Planning for Family Businesses

Simply put, strategic planning is creating a plan of action. Originally from the Greek roots, STER, to spread out, usually in a military sense, and AG to drive or to lead, the word strategy conjures up images of preparing for battle, or competition.

'Strategic planning' is different from 'vision' which is a future imagined, a hope of how things can be in the farther into future, 10-20 years from now. Rather, a strategic plan describes how you can get there. It's about making decisions in the present for the future and usually involves a 3-5 year time frame...

Read the Full Article >


Breakfast Meeting in January

January 14, 2004
TOPIC: Family Business Succession

(For family business clients and prospective clients; reservations necessary).
7:30 AM - 9:30 AM
Boston, MA

Join us for an interesting and informative breakfast meeting. The program will include a role-play of a family business, followed by a lively discussion. If you are going through, planning, or just wanting to know more about succession issues in your family business, please join us on January 14th!

Presenters

Jane Hilburt-Davis, Key Resources
Andre Pelletier, Private Clients Group, FleetBoston
Carrie Seligman, Northwestern Mutual
Ed Tarlow, Tarlow, Breed, Hart, Murphy, & Rodgers, P.C.

Call 781-861-0586 for more information and reservations


Family Businesses Facts and Figures

Did you Know ...

  • 8 out of every 10 businesses are family businesses
  • They produce 50% gross domestic product
  • Family firms comprise 37% of the Fortune 500 and 78% of jobs.
  • They comprise 60% of publicly traded companies
  • 88% of family businesses plan to stay in family
  • There is predicted a leadership change
    • In 39% of the family owned businesses in 5 years
    • And 56% 10 years
  • This will mean that an estimated .4 trillion $ of net worth will be transferred by 2004 (.8 trillion in next 20 years)

Yet- only 1/3 of family businesses make it to the second generation!

  • Some of the reasons for failure:
  • 55% of CEOs over 61 have not chosen successor
  • 19% have only written a will, no other estate plan
  • 73% have not written strategic plans

Source: Mass Mutual Survey (2003) and FFI.org


Question of the Month

A family business owner recently wrote us with the following question:

What should I look for in a consultant that I wish to hire?

A: Surprisingly, many family businesses often don't ask the right questions before they hire an advisor or consultant and end up with advisors not equipped to deal with the complexities they face. As one business owner (family business, by the way) claims, an 'educated consumer is our best customer'. What do family businesses need to know about this developing profession?

The number of professionals entering this new and 'hot' specialty come from a variety of fields, such as accounting, insurance, law, family therapy, and organization development, and each of these professions has technical expertise and skills that are critical to helping family businesses. However, not one single profession can answer all of the complex challenges of families in business.

Family businesses need to expect that their advisors are also trained and experienced in the evolving 'body of knowledge' about family business best practices, not just in their own field. They need to ask the right questions of potential advisors.

Key Questions to Ask:

  • Have you received special training in working with family businesses? If so, where and what?
  • What issues to you see in the family, business and ownership systems?
  • How would you help us deal with them? Where would you start?
  • What is the scope of the work? What will it cost?
  • Do you belong to a professional society or group that delivers continuing education focused on the special challenges of family businesses? Do you participate in these?
  • Do you have a network of professionals who you can call on to help you with the complexities?
  • Are you willing to work with my advisors?

By asking the right questions from the beginning, family businesses of all types can ensure that they are making informed choices to help them achieve their goals.

If you have a question for us, please feel free to email us at contact@familybusinessconsulting.com, or call 781-861-0586

 

"The art of prophecy is very difficult-especially with respect to the future."

- Mark Twain


Until next time,

Jane Hilburt-Davis

Key Resources
40 Middleby Road
Lexington, MA 02421

CONTACT US:

Phone: 781-861-0586
Fax: 781-862-3499
E-mail: contact@familybusinessconsulting.com

Web: www.FamilyBusinessConsulting.com

 

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This Communication Prepared by Human Service Solutions