Carpe annum, and get down to business
Published in The News & Observer January 2, 2011
Congratulations! You survived another holiday season: the shopping, the parties, the eating, the drinking and closing out business for 2010. Some businesses managed to do well. Most muddled through the economic downturn.
But now it is a new year: Welcome to 2011, let’s do better next year. Just as each new day provides a fresh start to try again, January is the time to step back and reflect on progress toward our goals, recommit to some, adjust others and set new ones. The same is true with your business, especially a family business with its added complexities. Here are five resolutions for your family business in 2011.
1. Establish, review or update important documents
I have a client with a buy-sell agreement among the siblings, funded with life insurance. However, each of the children has risen to a level where they are now being considered for gifts of stock. Maybe it is time to revisit the buy-sell? Estate taxes have changed, children are getting older, divorces and marriages may have happened, perhaps you’ve reconsidered your philanthropic interests.
And as you apparently managed to resist the advice of your heirs and forewent the 2010 estate tax opportunity, now is a good time reevaluate your will, especially if you did not do this last year.
If you are happen to be one of the cavalier or negligent family business owners who do not have a will, then I suggest you run, don’t walk, to your friendly neighborhood estate planning adviser or attorney. The Wake County Estate Planning Council can help you find a good one.
2. Implement or enhance financial controls
Establish a weekly flash report: a one page document showing week and month-to-date sales with year on year comparisons and percentage differences, receivables and payables with days late, cash on hand, and some key metrics like current ratio, inventory turns, and revenue per employee. Once you get in the rhythm, you will be able to quickly identify areas of concern.
Instill the discipline of full monthly financial review meetings. Do you have the right people managing the financial elements of your business? Do they need more training? Commit to addressing these issues. The N.C. Association of CPAs provides timely and robust education.
Make sure you are using the right software – maybe you have outgrown Quicken. Compare your financials to compiled statements from others in your industry to identify areas to improve.
3. Focus on good communication
Many family business issues stem from basic misunderstandings. Solve this by scheduling regular family business meetings. They should cover the basic operations of the business, but they also need to address any personal concerns of family members. If you are the family business leader, stress the importance of communication and be sure to walk the talk. A client of mine complained that employees did not take more initiative, but then I discovered that the owner was considered unapproachable.
Be open to hearing constructive criticism. The start of the year also presents the opportune time to address that particular subject with that certain family member.
4. Make a plan
Early generation family businesses can appear to make decisions by the seat of their pants. When asked why they took a particular action, the answer many times is, “that’s the way dad did it.” Sit down with the top managers to discuss goals and objectives for the year, and how to achieve them. Have individual meetings with top employees to outline their annual goals.
Ask yourself what your priorities are for the year, then meet with all family members to discuss what they would like to accomplish personally and professionally over the next 12 months. Have you begun thinking about succession? The earlier you begin planning the next generation of leadership, the better.
5. Carpe annum
Jan. 3 is the first work day of 2011. Take advantage of this new beginning and take action. Let your New Year’s resolution be to seize the month of January and start the year right for your family and business in 2011.
Read more here: http://www.newsobserver.com/2011/01/02/891065/carpe-annum-and-get-down-to-business.html#storylink=cpy