Frequently Asked Questions

What's involved in succession planning for family businesses?

Succession planning is an ongoing process including decisions around leadership. Group helps family companies develop strategic succession and continuity plans. … How do you protect what your family has worked so hard to build

How can I ensure that my small business will survive the transition into the next generation?

Less than one-third of family businesses survive the transition from first to second generation ownership. Of those that do, about half do not survive the transition from second to third generation ownership. At any given time, 40 percent of U.S. businesses are facing the transfer of ownership issue. Founders are trying to decide what to do with their businesses; however, the options are few.

The following is a list of options to consider:

  • Close the doors.
  • Sell to an outsider or employee.
  • Retain ownership but hire outside management.
  • Retain family ownership and management control.

There are four basic reasons why family firms fail to transfer the business successfully:

  • Lack of viability of the business.
  • Lack of planning.
  • Little desire on the owner’s part to transfer the firm.
  • Reluctance of offspring to join the firm.

The primary cause for failure is the lack of planning. With the right succession plans in place, the business, in most cases, will remain healthy.

What should I include in a business plan?
  • Your basic business concept. …
  • Your strategy and the specific actions you plan to take to implement it. …
  • Your products and services and their competitive advantages. …
  • The markets you’ll pursue. …
  • The background of your management team and key employees. …
  • Your financing needs.
What legal requirements might affect a home-based business?

If your business is a type that can be operated as a home-based business, you will still be subject to certain rules and regulations. In addition to zoning requirements, many neighborhoods are subject to restrictive covenants or homeowner’s association rules. There may be limitations on visits from customers or clients. There may also be restrictions on the percentage or total amount of your home’s square footage that can be used for the business. Parking on the street may be limited or prohibited. You may or may not be permitted to have outside employees come to work in your home. Signs, if permitted, are usually restricted in size

How can I avoid running into cash flow problems in my small business?
Keeping track of what money is coming in and going out of your business is essential. Remember, profit isn’t the same as cash flow.

7 tips to avoid a cash flow crisis
  1. Keep a cash flow forecast. …
  2. Keep on top of payments. …
  3. Stay on top of stock management. …
  4. Stay friendly with lenders. …
  5. Access credit. …
  6. Tighten up on your outgoings.
What steps can I take to improve my business cash flow?
If you want to improve cash flow, think about implementing some of thefollowing strategies.
  • Lease, Don’t Buy. …
  • Conduct Credit Checks on Customers. …
  • Form a Buying Cooperative. …
  • Send Invoices Out Immediately. …
  • Use Electronic Payments. …
  • Pay Suppliers Less. …
  • Open a High-Interest Savings Account. …
  • Increase Pricing.
Is a home-based business right for me?

A business strategic plan defines goals, objectives, and targets for a company and outlines its resources will be allocated in order to achieve them. When a strategic business plan is in place, it allows each generation an opportunity to chart a course for the firm. Setting business goals as a family will ensure that everyone has a clear picture of the company’s future.
A strategic plan is long-term in nature and focuses on where you want the business to be at some future date.

Should I keep a cash reserve in my small business?

The short answer is that your cash reserve should be sufficient for you to feel comfortable running your business. Some experts recommend having three months of expenses. … In other words, keeping a large reserve actually has a cost.