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Business Family vs Family Business

The Business of Family
Business Family vs Family Business
By Mike Boyd • Issue #17 • View online
While being a business family has significant differences to running a family business, many of the same fundamental principles for success apply. These include a clear purpose, vision & mission, open and transparent communication, a clearly defined organisational structure, and considerations around everything from finance to HR.
Within some family business, the nature of the company may dictate that members be focused on a specific area of business or industry, and the family’s identity is often forged in this arena. When the family exits their primary business, the evolution of their identity must continue and be found in new ways.
This can be daunting and challenging. Still, just as building a strong brand is vital to a business, so developing a shared family identity is essential to the success and continuity of the business family.
What’s perplexing is that the very entrepreneurs who’ve spent years tirelessly professionalising their businesses and generating wealth, often pay considerably less attention to ensuring that their personal wealth is protected and productive once their businesses are sold.
Numerous factors, both internal and external, can play a role in the erosion of family wealth. These include lack of strategic planning and long-term multi-generational vision and purpose development, fragmentation of inheritance, excessive risk-taking and bad investment decisions, unresolved family disputes and division, inflation, taxation, a failure to develop an entrepreneurial spirit across generations, as well as an insufficient separation between business and personal wealth.
Despite the widely-held “Three-Generation Wealth Rule” axiom, a total loss of wealth by the third generation doesn’t have to be inevitable. However, if family wealth is to continue to grow and survive across generations, it should be managed like a business.

Source: Spencer B. Burke - Olin Business School
Source: Spencer B. Burke - Olin Business School
This can often be found in pursuing new opportunities, and business families have a unique advantage in doing this due to their often agile nature and ability to take long term views. This means that they can not only pursue lucrative opportunities in multiple areas of personal interest but also seek deals in avenues that help them to remain relevant and engage future generations in the business of the family.
The transition from a family business to a business family is not always one that is anticipated by many entrepreneurs or family business owners. Still, it is one that bears consideration. Both scenarios present their unique challenges and opportunities.
However, the transition to becoming a business family, when planned for and managed effectively, can not only help to keep a family connected and working towards a common goal but also agile and resilient enough to build a legacy for generations.
The above article is paraphrased from some excellent work by Francois Botha, founder of Simple which helps to design and incubate the family offices of the future.
Recommended Book:
The Psychology of Money: Timeless lessons on wealth, greed, and happiness - Morgan Housel
This Week's Podcast Episode:
Thank you for your support - every bit of encouragement is greatly appreciated.
Thank you for your support - every bit of encouragement is greatly appreciated.
If you would like to leave a review for the podcast, this link will prompt you to open iTunes directly where you can leave a comment. Thank you!
Interesting links:
The Exor N.V. Holding Company - Agenelli Family
Stay in touch
Mike Boyd is the co-owner and CEO of the Vroom Group, Founder of Prosura insurance, Investor at Mudbrick Capital, Host of The Business of Family Podcast and an active member of YPO.
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Mike Boyd

I'm inspired by multi-generational businesses and the families who steward them.

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