The Christmas Dinner Rule for Family Businesses
Are you part of a family/whānau business? Do you have ground rules for when and where you talk about your business?
It’s what family business consultant Philip Pryor calls the ‘Christmas Dinner Rule’ – but can apply to any family gathering.
It basically involves having a quick chat to agree when you talk about the business and when you don’t. Some discussions might be better left to when everyone is rested and in the right space to have thoughtful conversations - with just the people concerned.
Building a successful family business
Working as a family can promote a closeness, foster a sense of pride, and provide a sense of deep purpose. But the blend of family and work/finances can also present opportunities for conflict. Good communication is vital – and that might include a few boundaries (like the Christmas Dinner Rule) around when business is off the table.
In our firm we see clients who are thriving as generations work alongside each other, or the next generation takes over the reins. There are strong common factors behind these successful partnerships or transitions. We notice family businesses prosper when they are:
transparent
fair
organised
documented
clear on roles, expectations and goals
Why documenting matters
As lawyers, we deal closely with the documentation side of family business. It might be looking at the best way to protect your assets, creating business agreements, or reviewing your Will or Family Trust. But the resulting legal document is often the final part of a bigger process that takes place.
Ensuring your legal documents are the right fit for your family’s needs requires a bigger discussion on the future of your operation. These conversations are not always easy. However, this process, and the subsequent creation or updating of these documents, can help to provide the clarity that’s needed for long-term success.
Start off with some key questions
At Apogee Legal we take time to firstly understand the journey of your family business up to this point, and how it might look in the future. Some key questions we might ask you could be:
What are your short and long term goals for the business, and for you personally? What does the business look like in 5 years or 10 years from now?
Do all family members understand and agree with these goals?
Do you have a succession plan?
What would happen if a key person is unexpectedly unable to work in your business?
Is your Will up to date? Has anything changed in your life that would need a review?
Make time for a big conversation in 2024
Take some time over the break (if it’s a break for you!) to reflect on these questions. Post-holidays, book time with your family business unit to take stock of your position, and discuss what the future looks like.
If you have any questions about your family business set-up or are thinking “where next?”, get in touch with our team. We can talk through your options, and the best way to achieve the aspirations of your family business and the individuals within it.