Family Business & the Next Generation
Most family business quarrels are about money and roles that were never spoken about
Who gets a salary, who draws from the business, who decides, who reports to whom, and what counts as fair between a brother who works every day and a sister who does not. These are the questions families avoid longest, and they matter most when avoided. This session shows how to start the conversation.
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Silence about money feels like peace until it does not.
In a family business, everyone knows that something is being paid and somebody is deciding, and nobody wants to be the first to say so. The brother who works longer hours assumes he is understood. The sister who left the business assumes she will be treated as an equal owner. The parents assume that everyone sees things as they do. Each assumption is reasonable and some of them are wrong.
Bringing these into the open is uncomfortable, and an unplanned conversation after something has gone wrong is far worse than a calm one before. Talking early can turn out to be less difficult than feared; the hardest part is often starting.
This session does not decide what is fair for any family, and it takes no side between parents, children, siblings or in-laws. It is not family counselling, legal advice or tax advice. Where a legal or tax point arises, the right person is a lawyer or chartered accountant who knows the family's situation.
The questions to separate
35 topics across 7 areas. Seven things that get tangled together, and are easier to discuss apart.
Role, Title and AuthorityWhat each person is actually responsible for.5
- A named area of responsibility for each family member
- Who has the final say in each area
- Who each person reports to, even if that is a relative
- How the title matches the work
- What happens when two relatives overlap
A role is not a reward, and it is not a seat. It is a piece of work with an owner.
Pay for the JobCompensation for work done.5
Some families pay by need or by seniority in the family, and are then surprised when the person doing the harder job feels undervalued. Pay for the work, and treat ownership separately.
- Pay for relatives that reflects the role and the market, not the relationship
- Paying a daughter-in-law or a brother-in-law the same way as an outsider in the same job
- How increases are decided and who decides them
- How a relative who does not work in the business is treated
- Recording what is paid, and why
Returns on OwnershipProfit is a different thing from salary.5
- What an owner receives because of ownership, as against work
- How profits are shared, and how often
- What stays in the business, and who decides that
- How a relative who owns but does not work is treated
- How the answer changes as the family grows
Family Money and Business MoneyOne of the most common sources of trouble.5
- Personal expenses paid out of the business
- Loans between the family and the business, in both directions
- Guarantees given by relatives for business borrowing
- A regular, recorded draw rather than withdrawals as needed
- Asking a chartered accountant what is permitted and how to record it
Tax treatment of family payments and drawings varies. Ask a chartered accountant before deciding, not after.
What Is FairSeveral reasonable answers.5
Different people hold different ideas of fairness in good faith. The aim is not to find the correct one, but to make sure the family knows which one it is using.
- Equal, in the sense that everyone gets the same
- Proportionate, in the sense that effort and risk count
- Needs-based, in the sense that circumstances differ
- How children who did not join the business are treated
- How daughters and sons are treated, and why some families differ
A Relative Who Is Not DeliveringThe hardest conversation.5
- Describing the work, not the person
- Having the conversation one-to-one, and early
- Offering a clear change of role, support or a time to review
- Knowing in advance what would happen if nothing changes
- Not letting resentment build for years
How to Raise ItStarting without starting a fight.5
- Picking a time, a place and a purpose in advance
- Opening with what you want for the family, not with a demand
- Asking everybody to say what they assume today
- Writing down what was agreed and sharing it
- Considering a neutral outsider to guide the conversation
Situations the session discusses
- A brother who works in the business and a brother who does not
- A son and a son-in-law doing similar jobs on different pay
- Parents who draw from the business and have never said how much
- A sibling who wants out, or wants a larger say
- A relative whose role was made up to give them an income
What participants leave with
- A plain list of the roles in their own business and who holds them
- A list of the money questions they have not yet asked
- A way to start the first conversation
- A list of what to take to a lawyer or accountant
- A sense that the subject can be discussed
How the session runs
People from family businesses describe how they raised pay, roles and ownership at home, what went well and what did not, without naming relatives. A short exercise follows in which each participant lists the unspoken assumptions in their own family and chooses one to raise. Participants share only what they choose to share. The session does not ask anyone to disclose figures. Evenings or weekends, in person or online.
What your students leave with
- A shared vocabulary for roles, pay, profit and ownership, so the conversation is about the same thing
- A way to start the conversation about pay without it sounding like an accusation
- A clearer view of what fairness can mean, and why families disagree about it
- Practical ways to separate family money from business money
- Ways to deal with a relative who is not pulling their weight
- A list of what to write down, and a sense of who can help with it
Scheduled sessions
Nothing scheduled yet
Sessions are arranged with a college once a date is agreed. Ask us and we will find the right person for it.
A student rather than a college? See what is coming up, or ask your placement team to host this.
A conversation held early costs less than one held in a crisis.
Tell us who your students are and what stage they are at. Sessions are free for participants.