A family business has its own special advantages, but maintaining its continuity over generations can be difficult. Family matters can at times be emotionally challenging on their own, without adding the additional layer of managing business needs and family needs simultaneously. If you want your family owned business to succeed for years to come, developing a continuity plan should be among your highest priorities. In this article, we will discuss fundamental approaches to a family business continuity plan so that you can ensure that your business survives and thrives for decades.

The Burning Problem: How to Develop a Family Business Continuity Plan?

Operating a family owned business often results in a number of unique difficulties. The blend of family relations and business expansion tends to put business owners in a dilemma as to how ultimate success can be achieved. Building a family business continuity plan resolves many of these issues. This plan ensures that your business continues to grow and evolve while preserving family values and legacy.

Article summary

While addressing family business succession planning, one must think about the type of business as well as family member roles and ownership.” The “5 C’s” of a family business continuity plan are control, career, capital, conflict and culture. In addition, the “PPP” approach – Parallel, Planning, and Process – helps in making business decisions regarding the direction to focus on decorations. The leadership strategy is also very important which integrates having an ownership mindset, thoughtfully looking for growth prospects, and crafting the vision of where you want to be in the long-term.

Main Content

Golden Statement:

There’s always a starting point for any large family-owned enterprise. If you happen to be a proprietor of a small family business, then your desire is for your small business’s name to be well known all over the country. It is possible, but it needs a structured continuity business plan. Wishing for the future is different from working for your objectives, it requires documenting and strategies.

Noted Topic #1: Crafting a Plan for Continuity among Different Family-owned Business Lines and Units

A continuity plan is presented as a five-year forecast of where the business is today and where it aims to be in the next five years. A significant proportion of businesses fail as a result of inadequate planning.

The National Association of Small Businesses states that 42 percent of businesses fail as a result of unrealistic expectations. 17 percent of family businesses have the goods to sell but no strategy for sustained growth. 82 percent of businesses do not succeed as a result of cash flow problems. 30 percent of businesses reach their 10th year.

Seeing the need for a proper strategic plan in family business practice is center stage. It is critical to learn how to manage the pressures of the family setting and the business environment simultaneously.

Your family business is likely to have these three systems integrated, and each needs careful consideration when developing a continuity plan:

Business System:
Organizational Mission Statement
Business Architecture – includes the physical office, resource allocation, and the strategic planning of how to achieve business objectives.

Family System:
Responsibilities that each family member assumes.
Core family values and interests.
Well-defined and effective communication to mitigate conflict.

Ownership & Governance System:
Legal Entity (LLP, Private Limited, Partnership, etc.)
Creating a positive alignment of the family members’ individual goals with the business for the growth of the company.

The system integration enables a family business to counterbalance the emotional component of the family with the functional aspect of the business, which is important for continuity over time.

Key Note #2: The 5 C’s of the Family Business Continuity Plan
These 5 C’s are the cornerstones of the continuity plan designed for a family business:

Control:
Create a system for managing different parts of the business. For instance, there should be family member role delineation and a chain of command. There is less chance for ambiguity and waste within the company.

Career:
Outline What a family member can do and what needs a professional. These tasks will change with the growth of the business, requiring constant adaption.Capital:

Determining capital requirements and aid investment decisions. Decide if reinvestment by family members is sufficient or if outside investment is needed to grow the business.

Conflict:

Family disputes are known to hinder business expansion goals. Form actionable strategies that counteract these familial conflicts without damaging the family business so that they do not become problems down the line.

Culture:

The culture of a family business is everything. As you grow, work toward new objectives while keeping the family values at the center of all policies and decisions.

These five C’s will help businesses build towards a sustainable future for the family firm.

Key Note #3: The PPP (Parallel, Planning, Process) Model

Use of the PPP model organizes how one will manage the constant family business dilemmas. Who gets priority, family or outside professionals, is often vague. The PPP model provides helpful information to the key questions and assists in actions that helps meet the family and business goals simultaneously.

Process: This level deals with the comprehensive strategy of the business, which includes the creation of value to the owner and customer of the business, in this case, to a family business.

Planning: Analyze the business on a regular basis and have an organizational growth plan ready at all times. This plan should include financial objectives and goals, core competencies, weaknesses, available business possibilities, and other related factors such as industry developments and expansion tendencies.

Scale-Up: Take with you the aspects of shareholder value, dilution, and external capital required so that the continued existence and growth of the business can be achieved effectively and efficiently.

This ensures that every aspect of the business is looked at in a holistic way, resulting in better positive flow interactions between family members and the management team.

Key Note #4: Leadership Checklist Strategy

A strategy for leadership is important for the efficient functioning of the business and its sustainable growth. Check off the points for effective family business leadership below:

Embrace Owner Mentality:

As an entrepreneur, you have to plan how to achieve the strategies because it is your responsibility. You should deploy with goals in mind to achieve the objectives of the business.

Be Careful as You Enter New Potential Areas:

Be on the lookout for potential new areas but do not engage yourself in unexplored territory. Always do due diligence before jumping into new opportunities.

Have a Focus on Long-Term Leadership, Vision And Strategy:

Make sure that the family business does not disappear because that would be a waste. They plan for the long term and not just immediate results.

Put it Out in Writing:

When everyone reads the plan, it becomes easier for the entire family and business team to visualize your goals.

Don’t Forget to Bring Your Plan’s Control Along:

Every plan has to be set in stone, and yet, it’s important to retain some level of flexibility. Be ready to make changes along the way.

Get Help When Needed:

When it gets too complicated, don’t be afraid to reach for the help of outsiders. Their detached insight can help manage crucial bifurcations.

This approach will keep your family business growing while ensuring its continuity throughout the years.

Main Lessons From The Article:

Use the PPP model to make important family business decisions.

Have an owner mentality to enforce authority in your business.

Control plans, positively or negatively, with regards to arising issues.

Get external help when it’s time to make a decision.

Ensure that family members understand how they are motivated by and how they work within the company’s goals and strategies and communicate freely.

This is how the family business continuity plan will help the family business not only survive, but thrive for generations.