Common Causes of Family Business Conflict & What to Do About Them.
Family Business Mediator Video 25: Competing Financial Interests – Family Vs Business Needs.
By Jon Kenfield. Solutionist
• Classic cause of conflict – competing financial needs and interests. Family needs money to live on; business needs money to ensure sustainable trading.
• Family money is for personal use, which may be necessities, luxuries, or anything in between. Time frames are personal and subjective.
• Business money is to maintain competitiveness and generate profits. Time frames are commercial and objective.
• Assuming money is a scarce resource, getting the balance right is always challenging.
Solution:
• Clarify personal and business needs and expectations (long term perspectives make it easier to suffer short term pain).
• Develop financial plans so everyone knows what is likely to happen and what their role is in making it happen.