Higher Education in Family Business: Reasons to Work with a Certified Family Business AdvisorJuly 14, 2015
You already know your family business is unique. It faces the challenges of a small business, of your specific industry, and of your family all in one. Not only do work issues come home with you, family issues are brought to work every day as well. The extra layer of family involvement can make every business decision even more daunting. With this in mind, I received my Certificate in Family Business Advising from the Family Firm Institute (FFI) in 2011 to better help my clients.
In 2000, the FFI started the Certificate in Family Business Advising (CFBA) program for professionals who serve family businesses. The FFI was created to provide research-based learning and relevant tools for advisors and consultants, academics and family enterprise members to drive success. Of course, the opportunity to focus specifically on working with the special needs of family businesses has been advantageous for my practice. In the past we have outlined reasons to work with a family business advisor, but following are some of the many reasons and benefits that can be provided to your family business by working with an accounting professional with a CFBA designation.
Awareness of where the differences lie between ordinary businesses and family businesses. Operational and regulatory aspects of family and non-family owned businesses are similar. They differ primarily in the area of family dynamics. Business, estate, succession and financial planning in a family business must consider the wishes of not only the founders of a business, but also those of future generations. Oftentimes, there are conflicts or differences of opinion within families. Having worked with family businesses for years, we sought to formalize our Practice and really expand our knowledge to best serve our family business clients as they grow or face changes in leadership, and other situations that are unique within a family dynamic. Acknowledging the differences means we can also offer solutions for those differences.
Family businesses have different governance needs. Like other businesses, family businesses often utilize a Board of Directors to oversee company direction. The Board dynamic will be different with a combination of family and non-family members. This combination can provide an additional source of conflict. An additional type of governance for family businesses as well as for the family itself is the family council. The involvement of family business experts as part of your trusted business advisory team can help your business decide which type(s) of governance will provide maximum efficiency and efficacy.
Family business succession is much more personal than that of a standard business. For family business succession, it is important for a firm to think about the direction in which it wishes to head, properly groom successors, consider the transition process, and think about how succession will affect the company’s valuation. Family business succession brings more assumptions with it than a regular firm. It could be more tacitly implied who is to lead in the future, and there is a more personal fear when discussing the possible death or incapacity of the family business leader beyond practical business matters. A family business advisor is keenly aware of these issues and has tools to assist the firm in addressing them for the protection of future generations.
Past studies of family businesses have revealed methodologies for use in the future. The FFI and other entities took the time and did the research over the years to discover these unique family business challenges, and have created courses to help key advisors learn options for finding solutions. A methodology may involve assessing family business needs, then making recommendations for action that include a range of proven tools applied to help achieve selected objectives.
A Certificate in Family Business Advising benefits both family business advisors and their clients by establishing knowledge standards for better serving family-owned enterprises. Knowing that family businesses have differences is part of the solution, but learning what they are and how to work with them is the comprehensive approach of a certified family business advisor.
Contact me at firstname.lastname@example.org or 732.747.0500 with questions about our special experience from the CFBA program, or to receive a complimentary consultation with one of our family business advisors.