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Family business is an income
generating venture
established jointly by the husband and wife to provide strong financial
base
for their family.
Prerequisites
for
Family Business
Husband and wife aspiring to
have a family business
must satisfy the following conditions.
- Both of
them must operate a
joint account in their family.
- They must see themselves as
partners with equal right in the
business.
- They must both regard their
marriage as a life relationship.
- There must be mutual trust
between them.
- They must agree to register
the company with their names. In an
ideal situation the husband should be the Chairman/Chief Executive
Officer
of the company, the wife should be the Managing Director and each
of their
children should be directors. This will ensure continuity of the
business.
- They must have a settled and
peaceful home.
- Both of them must have the
fear of God and demonstrate it in their
interaction.
Determining
the
Type of Family Business
Husband and wife cannot wake
up one day and start a
family business. They must have vision for the business. The vision
usually
starts with one person. The party that receives the vision will sell it
out to
the other party. Until the other party receives the vision and is
convinced to
go along with the party that received the vision, they should not start.
What to consider in deciding a
venture that a
family can undertake as a family business are as follows:
- Is it approved by God?
- Does it contribute positively
to the life of other people?
- Does it conform to legal code
of the nation in which it is to be
established?
- Who will be in charge of the
day to day running of the affairs of
the business?
- If it involves technical
input that the husband and wife cannot
provide, how will the family recruit the technical expert that will
handle
the technical aspect.
- Feasibility and viability
report of the business should be prepared
by an experienced financial consultant. This will reveal the cost /
benefit analysis of the venture.
- Sources of capital to finance
the company must be considered. The
family may use the family saving, contributions by group of people
or bank
loan.
- The location of the business.
This is very important because it
determines the growth of the business.
- It must be incorporated in
the Corporate Affairs Commission.
How to
Operate Family Business
If the family business is to
grow and continue from
generation to generation, it must be operated very well.
- Both husband and wife must
commit themselves to the success of the
business.
- They must set aside certain
time daily to discuss the progress of
the work.
- The employee working in the
venture must be well managed and
monitored for effective operation of the business.
- The
profit of the business must be ploughed back into the expansion
of the business. For this reason either the husband or wife must be
in a
paid employment at the beginning of the family business. The salary
of the
working party should be used to run the affairs of the family at
the
gestation period of the business.
- As much as possible, the
extended family should be kept away from
the affairs of the business.
- One of the children of the
family must be brought into the
management of the business at the appropriate time. This will
ensure the
continuity of the business.
- A current account should be
opened in the name of the business in a
commercial bank. This may help the family when seeking for bank
loan for
the expansion of the business.
- The family should think of
business diversification. This will
create strong financial base for the family.
- The family must seek the
services of a financial consultant that
will offer financial advice from time to time.
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