As well as a clearly defined business plan, it is important to have your business’s financial plan in order. This is especially significant when involved in a family business, as it will give a concrete overview of how business funds will be sourced and spent at the outset, so that this cannot be changed or argued against without consensus.
As the owner/ operator of the business it is part of your responsibilities to source investment and growth opportunities that will benefit your business in the future. It can often be the case, however, that other family members within the business will not see these opportunities as necessary, but only as detracting from year-end statements and dividends.
In such situations, a solid financial plan, which outlays the planned yearly budgets, expenses and potential resources for investment opportunities would be invaluable. With this tool, you could clearly demonstrate how business investments would affect profitability, cash flow and dividends in the current year and in future years, to support your arguments.
However, as can often be the case in family business situations, it may be difficult to convince other family members of the merit of your ideas. Make sure that such proposals are based on facts and figures garnered from sources outside of the family, and that they are presented in a clear, concise and unemotional manner.
If necessary, it can often be beneficial to elicit the help of an outside consultant, a business or financial specialist for example, to present your case for you. This will remove the proposal from you in the eyes of your audience, helping to eliminate emotional subjectivity so that only the facts are highlighted for a decision to be based upon.