Family Business Compensation Strategies and Tips
As experienced Business Turnaround Specialists, I have seen how Family Businesses can be particularly tricky when determining compensation for the family while ensuring it is fair across the board for the company as a whole. Compensation and profit sharing can be difficult issues as some family members believe they contribute to the overall success of the business more than others in the family. Here are some helpful tips when considering compensation levels:
- Compensation should not be based on family position but rather on job performance, contribution, skills and experience.
- Benefits are of value financial incentives and rewards, but it is very important family benefits conform to those given to non-family employees.
- Stock Plans, Deferred Profit-Sharing Plans, Pension Plans and Stock Purchase Programs can be very effective in placating unhappy family members. These type of Plans also do not hamper cash-flows significantly, so profitability is maintained and company Business Turnaround Plans is not effected, yet has the synergistic effect of attracting, holding and pulling family members together. Be sure your family company’s Business Planning is well situated.
- frequently Family Members are given a Managerial title and role but be heedful not to show favoritism. If a family member does not have the qualifications to be a manager, then for the sake of the business, employee dealings and the company’s Strategic Plan, the family member should be given a position which matches his / her experience level.
- There should be a double standard when analyzing a family member employee and non-family member employee. Hold the family member to a higher standard. Require the family member to work up the ranks of the company and earn the requisite pay and position. In this way, the family member sets a great example for the business, becomes very qualified for a management position in the future and doesn’t take the job for granted. While gaining experience with another outside Company is recommended and beneficial for family members, they should enter the family business on a level which gives them a firm understanding of the entire Company and how it works. Once the family member has cross-trained in the Company’s assorted departments, gaining invaluable insight into Company operations, an appropriate position and title can be assigned and rewarded.
About The Article Writer ~ Frank Goley with ABC Business Consulting
Frank Goley is a business consultant, business turnaround consultant, business plan expert, business coach, small business consultant, business planner, marketing consultant, online marketing seo consultant, and business plan consultant for ABC Business Consulting. Frank is considered an expert in writing, developing and implementing business plans, business turnaround plans, funding business plans, marketing plans, strategic plans and web marketing plans. Frank offers comprehensive business consulting, business coaching, business turnaround consulting, along with web seo, web development and web marketing consulting, to small and medium size companies. Frank is the author of a business plan book, The Comprehensive Business Plan Workbook – A Step by Step Guide to Effective Business Planning, and he has over 110 published articles and e-books on business success strategies. He also writes the Business Success Strategies Blog.
