McCracken Family Business Consulting

Ownership

family businesses do ownership differently

 

Every family enterprise must decide who can be an owner, what return on investment they receive and what the owners do.

 

Who can be an owner?

An agenda for this discussion would include the following:

  • Do you want to restrict ownership to the direct descendants of a common ancestor (bloodline), or include the wider family?

  • How about owners working or not working in the business?

 

  • What about non-family becoming owners, like employees and outside investors?

  • How do you feel about trusts being owners?

 

return on investment

Owners of a successful family enterprise agree about the overall return on investment that they want to achieve. This often combines financial returns and other returns on investment to which the owners attribute value that cannot be measured entirely in financial terms. For example:

  • Being custodians of a legacy

  • Passing ownership to future generations

  • Maintaining family connections through the enterprise

  • Providing employment in a local area

What owners do

If you want your enterprise to remain owner-managed, the key task is balancing the commercial needs of the enterprise with the leadership ability in your family.

Alternatively, you could consider becoming an enterprise that is family owned but not family led. In this case, owners will not work in the enterprise day-to-day but will be involved through receiving regular information and in making some decisions that matter to the owners. In such an enterprise, there needs to be a clear boundary between the owners and those who direct and manage the enterprise as is summed up in the saying, ‘good fences make good neighbours.’