Family Business Assessment (Checklist)

Source: Small Business Management

Business issues

Yes/No

1. Have goals for sales and profits been set? --- ---

2. Do we have a business plan? --- ---

3. Do we have a strategic plan? --- ---

4. Is the business in good financial standing? --- ---

5. Do we have a compensation system? --- ---

6. Do we have a performance appraisal system? --- ---

7. Do we have a board of directors? --- ---

8. Can we attract and retain non family managers? --- ---

9. Is the business in a highly competitive industry? --- ---

10. Are we experiencing an increase in sales? --- ---

Family business issues

1. Do family members know they are welcome to join the firm? --- ---

2. Do we have policies for entry into and exit from the firm? --- ---

3. Is a system in place to train and develop the successor? --- ---

4. Do we have a succession plan? --- ---

5. Can family members in the firm effectively communicate? --- ---

6. Do we have a system to resolve conflict among family members? --- ---

7. Are women welcomed in the business? --- ---

8. Is there a minimum amount of sibling rivalry in the firm? --- ---

9. Is there a system in place for choosing a successor? --- ---

10. Does the family agree on goals for the business? --- ---

If you answered no to any item action should be outlined and implemented to address and set policies for that item.

Section II

The following items need to be discussed in the family business:

Leadership succession.
Ownership transfer.
Communication policies.
Compensation policies.
Rights and responsibilities of nonfamily employees.
Rights and responsibilities of in-laws.
Creating change.
Development of a management team.
Long-term planning for the business.
Obtaining financing.
Financial equity among children.
Resolving conflict.
Hiring and firing practices.
Sibling rivalry.
Organizational relationships.
Working with advisers.

This list should be distributed to every family member. Responses should be compared and issues of concern to family members identified. Unresolved issues should be discussed and polices established to resolve them.

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