Following on from my previous post about how to define a family business, I remembered the moment when we became a family business.
Of course, bearing in mind my comments about the difficulty in finding a common definition of the term, the moment we “became” a family business was more in our minds than following a specific event that put our business within such a definition.
I set up my business back in 2004 when I was on my own. Consequently, I Never thought of my business as a family business because there was no family around or in the business. Even after I had met my wife and we had a son, it continued to be my business and there was no notion of a family business in the true sense of the word.
It all started when I decided to convert the business to a limited liability entity. I wanted to rename the business to Janzen & Co, mainly to prepare it to take on additional partners. As a side effect I had to actually take on a partner to get the name approved by the registry court. When my spouse then became a co-shareholder that was the moment when, in my mind, we technically became a family business. However, that alone did not change anything for me or for us until quite some time later.
At some point I had the need for an accountability partner and I also wanted to start informing the family about what I do all day to give them a better understanding about where the bread on the table comes from.
I therefore invited my spouse to come into the office regularly for informal shareholder meetings. When we met for the first of those meetings, I gave her a brief rundown of our current activities and where I wanted the business to go. I very clearly remember that to be the moment when the business started to feel like a family business for me. She also confirmed that from her point of view, when we spoke about that moment later at home. That initial meeting was the start to a more formalised business governance including reporting, goal setting, control and decision making mechanisms.
Incidentally, said moment also marked the beginning of more formal governance on a family level for us. We are now on a road to structure our holdings and finances in a way to prepare for eventualities and to enable the family to deal with any unplanned for situations and, in the longer term, for planned succession.
I would be very interested to hear about your moments and situations that triggered your journey to become a family business and governance processes. Send me an email via our contact form or give us a call on +49 69 420 8898 0 and ask to arrange a chat with me.