Continued from Part I of the article on Family Businesses ..
Growing up in the 80’s, I remember watching Doordarshan, that was the only TV channel at that time. We used to look forward to the Chitrahar, Ramayan, Mahabharat and the Sunday movie. On one such Sunday I was watching a movie (I don’t remember the name) and it had a song – “Jahaan daal daal par sone ki chidiya karti hai basera woh Bharat Desh hai Mera”. This may sound a bit filmy but I feel we are heading towards these days again especially given the current political and economic situation. The social and the economic mood is upbeat across the country. Many business have opened their war chests as they feel more opportunities will come their way.
We have seen a lot of technological advances in the last couple of decades. From bullock carts to private jets, postman to emails, and so on – life has evolved. But has life really changed? Lets take a quick look. When I was growing up, we used visit a ‘Mela‘ or a ‘Jatra’. There would be entertainment, plays, music, shops and eateries. And where do we go today? It is to the Malls for the exact same purpose! Melas used to have a bhel-wala, popcorn-wala and a gola-wala. Malls these days have pizza hut, dosa shop, donuts and more. The only real difference is that Melas used to be outdoor events, opening out to the sky and today’s malls are air conditioned with a fancy facade of glass and concrete. Similarly, back in the early times we use to have Rajas and Maharajas and today we have corporates. The form and packaging may have changed but the fundamental structures remain the same across the board.
With changing time and technology, value and wealth creation has also multiplied. With this the family businesses that started out as small entrepreneurs have also evolved into large business houses. These family businesses, today, could have presence in multiple countries. They may employ a large workforce and would often be engaged in multiple businesses. Are all these business families aware and ready to take on the complexities that come along with their new proportions of wealth? Have these business families made plans for their succession? Are they ready take the bull by the horns and say ‘Let me deal with it‘ ?
Things to keep in mind before venturing into estate planning and family business succession planning
Most family businesses don’t even know when, where and how to start to start the planning process. They are aware that they need to do SOMETHING but they are not aware of the specifics. Before starting out on family business planning, one needs to answer the following questions:
- Are the family members serious about this process?
- Are you looking for a quick-fix solution?
- How honestly do you want to plan succession?
- Are you ready to discuss all the issues openly?
- Are you ready to work as a team ?
- Do you think that inaction on these matters can lead to issues?
Once you have addressed these fundamental questions and before you embark on the family business planning journey, please pack your bags well and find the traveler’s guide below.
- First and foremost thing to remember is that that this is a journey and the destination could be far. So don’t lose your way. Carry the map.
- This is a time consuming process and everyone needs to be patient. Meditate.
- Everyone needs to be vocal and honest and should be prepared to share his/her views so that there are fewer misunderstandings on the way. Pack your bags well.
Just remember that you have set out on this journey to achieve some common objectives, resolve issues (where possible) and help each other reach their respective destination. If you get this part right, then everything else about Family business planning will automatically fall into place.