Strategic Planning for a business can start before the enterprise is even started. In the case of a family business, the structure of the family itself has already been in place for a long time, perhaps years or even generations. Inevitably, many of the challenges family businesses face arise from the family structure and how that manifests in the business. Being able to separate the planning that comes from the family itself for the business from the planning needed within the business is key in avoiding or handling many if not most of these challenges.

The Family Council may be the solution for gathering the family and its needs and wants as they relate to the family business in an organized manner. This group is typically comprised of most adult members of the immediate family – whether or not they are part of the business, or the extended family where warranted. As in-laws are often considered part of the family, they may be included in this council, as well as younger family members who the group feels should have a say. As is the case with most families, there is no formal "planning" structure yet in place, and leadership roles are usually determined by the family hierarchy, such as birth order. An older child who currently is low in the family hierarchy yet has a lot at stake in the future of the business may not be objectively heard in family discussions.

In order to manage family members already set in their ways, a professional planner on the outside of the family is recommended to guide the planning of the Family Council and keep the group focused. Since the family business is often one of the largest if not the largest asset of the family, a Certified Financial Planner makes an ideal candidate for this position. The role of the planner could include exploring the following important issues:

• Who will own and run the business in the future
• How will decisions regarding the family’s involvement in the business be made?
• What are the financial expectations for those family members who are in the business, and for those who are not?

Generally, the members of the Family Council will be assisted in learning how to express their desires for their own future, their role in or out of the business, their concerns about where the business is going whether or not they work in it, and perhaps redefining their role in their family. Other family members may be caught off-guard when actual wants and needs are discussed, but this is part of the purpose of the Family Council. The family can work on discussing these areas of concern in private, before they inevitably surface in the business itself, where they could cause much more damage.

It can be difficult to maintain decorum and privacy in a family enterprise, but a unified family front that is shaped by a Family Council can much better present a consensus to the Board of Directors, which performs the strategic planning for the actual business. Negotiation of differences, such as hiring practices for family members into the business, can occur between the Family Council and the Board of Directors, allowing for a professional base to build the strategic plan upon.

NOTE: The information contained herein in this article and on this Web site is not intended as legal or financial advice.