The Importance of a Family Business Constitution

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FAMILY BUSINESS CONSULTING

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It’s natural that in time, family businesses grow over multiple generations, which means the number of individuals involved increases. In addition to the number of individuals increasing, family member's expectations regarding the business may increase as well and related conflicts may arise.

Creating a Family Business Constitution can be an easy way to manage and deal with these conflicts if and when they arise within your family business.

Few family business owners have taken full advantage of this useful business tool. However, those family business owners who have incorporated a Family Business Constitution into their business have found that implementing a constitution has been a helpful instrument in preserving the legacy of the business while helping to sustain the enterprise for future generations.

A Family Business Constitution is not only an extra tip in the businesses success; it also engenders a sense of pride in the family and its business by linking the past, present and future generations with each other.

Here are a couple of tips to help get your Family Business Constitution started:

1. Document the mission, values, philosophy and principles that govern your family and its business, including the struggles of past generations. 
2. Outline the business’s strategy and its long- and short-term goals. 
3. Define a dispute resolution processes to deal with potential conflicts affecting the business and the family. 
4. Define the roles, composition and powers of key governing and other constituencies of the business, including key management, directors, shareholders and family members.

For a more detailed list of what a Family Business Constitution should include, click HERE, or call Continuity Family Business Consulting. For more information, visit ContinuityFBC.com.