Got Family Quick Bits: Sharing

Welcome to Got Family. I am Carey Berger and today we’re going to talk about sharing. Yes, that’s right. You learned it when you were three and you didn’t like it then and whether or not you like it now is a whole other discussion, depending upon the circumstance I’m sure. But nonetheless, let’s talk about sharing. So I am the patriarch or the matriarch of a family business and I have five children and I would like to go ahead and perpetuate my family business with my family. I love them all equally, why can’t they all just share? Why can’t they all just own the business together? That is the difficult question. So I want to go ahead and give you the short answer. Sharing works to the extent that either A) everyone is equally committed and involved or B) we have a way to divide our commitment and involvement in such a way that allows us to be as committed and involved as we wish to and that may not be a constant. What does that mean? A) equally is a fantasy for most realities. Truth of the matter is, equal is really hard to predict and almost impossible to maintain. I have seen at work. In fact I have a client of mine that has seven siblings and they are equally committed and equally involved and they share the leadership and ownership of this family business equally. They are however, the exception. Having said that, for most of us equally committed and involved, even if you were in that moment at this time all on the same page, will you still be there 10 years from now? So at the very least, if you are in that place then at least take the time to recognize that it could change and offer an alternative when you get to B) which is that it’s not equal but we have other ways we can be involved. So then we come down to alright, I’m definitely committed and I’m definitely involved but I’m not the same as you and we’re not the same amount of this or that or the other and it’s changed a little over time. What are we going to do about that? If the business is of a size that there’s a place for a role as a shareholder without necessarily being the traditional owner, leader then that’s one more position that I could choose. If the business is of a size that I could be simply an investor or a lender to this business and again not as involved in other pieces that’s another spot that’s open that I could choose. If there’s a place for multiple levels of involvement in ownership and leadership and direction than I’ve increased the chances that I can find a slot that I will fit or that my siblings will fit or that my grandchildren will fit. And because of that I’ve increased the chance that I’ll be able to find one that fits in that we can share in a way that works for us based upon our different desires for commitment and involvement. And so that’s the key. For most, the simple answer is this: if the business is going to be one that can only really support one owner in the traditional sense of what is an owner, then probably you can’t share it. There aren’t enough spots in the equation to be able to fit different needs. You say, well then we can be partners, we could be equal owners. That’s true but that’s going to require only one slot that looks very similar to the other and the fact that they someday don’t look the same may make it really hard to maintain a spot that’s big enough for both of us in this world. That’s the challenge. If we have a big enough business that there are multiple roles that it can support, then it’s more likely that we have the ability in the long term to share it over multiple people. I don’t know if that’s good news or bad news for you in your particular business, but those the kind of questions and situations we deal with here at the crossroads of business and family.