Developing Effective Ownership

Family businesses can be very complex organizations because there are three forces that interact with each other:

  • The Family
  • The Business
  • Owners

These forces are dynamic and change over time as the business matures and the family grows in numbers.  When the business started it may have been only the entrepreneur. One or two individuals ran and owned the company. Life was simple! But as time passes, multiple generations of family members come onto the scene, some who pursue a career in the family business, other who opt out and pursue their dreams elsewhere.

With many mouths to feed there are many family members – both employees and non-employees – who want a piece of the ownership action.

To make matters even more interesting lets throw a key, non-family manager into the mix.  This might be an individual who is a major asset to the company and someone the owner can’t afford to lose. Chances are you will need to offer this employee an equity stake in the company to maintain their loyalty for the family business.

There are many options now available to the original business owner when he/she considers ownership of their company.  There are good choices and choices that can lead to family division and company failure.

Talk with Lohoff-Gaida Consulting about these different options on how to structure ownership of your family business. We will help you to continue the family legacy while at the same time achieving commitment and satisfaction from all stakeholders.