Last week we meet with a number of CPAs, tax season was over. We talked about many things, their businesses, families and concerns. Many CPA firms are Family Businesses. Accounting is an information system. More precisely, it is the measurement methodology and communication system designed to produce selected quantitative data (usually in monetary terms) about an entity engaged in economic activity. Every firm, profit and nonprofit need measurement methodology – metrics to plan, make improvements and succeed.
Running a Family business is filled with challenges. A business owner has to provide a quality product or service, find someone who is willing to buy it, manage employees, and have enough money in the bank to cover expenses. So what can help make this easier? One way is with the advice of a great accountant.
Most family business owners think of an accounting professional as someone who makes sure taxes are paid on time and accurately. While this is a vital function, they can also do so much more. Skilled accountants can help maintain financial statements, forecast cash flow, provide business advice for expansion (education), and help you reduce unnecessary expenses(education). Their advice — their education — can spell the difference between business success and failure.
Education is not preparation for life; education is life itself.
10 Facts About Family Businesses
• 80% of the world’s businesses are family owned
• 25% of the family businesses are planning the handover of the enterprise within 5 years.
• 50% of family business’ leaders wish to hand over their company to their children. Did you know that 2/3 of enterprises do not have clear criteria as to how to choose a family member who wishes to have a role in the business? (About 50% of family businesses do not have a succession plan.
• Family businesses face a high turnover rate of employees not part of the family.
• Over 25% of family businesses expect a woman to be their next executive director
• Over 30% of family businesses survive the transition of leadership to the second generation.
• Market conditions are the main concerns of the family business leaders.
• Attracting qualified staff is a major issue for the future of family businesses.
Family Businesses need partners, advisors and some outside experts. An initial assessment is a key factor. Prescription without diagnosis is malpractice. So of the assessment is a list of questions. A key is to create a conversation. Sometimes we use the magic wand question. It goes something like this: “If I could wave a magic wand in your business right now, what are the 5-6 things you’d like to happen?” Another approach is to ask for the top 5 frustrations?
Family businesses need to be on a learning odyssey. Pick a subject, accounting sales, marketing, talent management; it would be rare when a family owned business had all the experts. Patience is a life lesson. It’s one of the themes in Homer’s Odyssey. Family businesses need to be patience and open to ideas and assistance.