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Create A Family Furniture Store Money Plan

Furniture World Magazine
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Article Summary: Most families in the retail furniture business just don’t talk about money. Money entices us with opportunities. Money torments us with uncertainty, and leads us to decisions we normally would not make. If you’re not careful, money and possessions will become the downfall of your family and your business.

View all articles by David Lively


Money can separate families. Feuds brew. Brothers and sisters don’t speak. Cousins are hostile. Parents don’t talk to their children face-to-face.

 

The Family Business Series by David Lively

 

They say, “Money talks,” but it’s safe to say most families don’t talk about money. Money entices us with opportunities. Money torments us with uncertainty. Money tempts. Money leads us to decisions we normally would not make.

 

If you’re not careful, money and possessions will become the downfall of your family and your business.

 

I have seen firsthand how money separates families. Feuds begin to brew. Brothers and sisters don’t speak directly. Cousins lob the hostilities back and forth. Parents leave notes and send messages so they don’t have to talk to their children face-to-face. Often the first real communication between these family members is at a funeral, and it goes badly – as you might imagine.

 

One generation may have worked their entire lives building a company and they want to retire. Another generation may have worked for the company for a number of years. A final generation may have graduated from a fine university believing they are entitled to the same freedom as adults as they had while living on their parent’s nickel.

 

Each generation has real, serious, and legitimate reason to care about how the family decides to handle money. However, there is no chance of a good outcome unless the family clarifies who is responsible for what, communicates the vision to everyone involved, and commits to the plan.

 

Consider these three parts which lead to money harmony:

 

1. Clarification

2. Communication

3. Commitment

 

CLARIFICATION

 

Before you begin to talk with your family about money, you must have a clear understanding of what you believe yourself!  Your beliefs will create your attitudes, behaviors, and habits toward money. Ask yourself:

 

  •  What are your core beliefs about borrowing and investing?
  • How does having money make you feel? How do you feel when you don’t have enough?
  • Do you believe the family’s wealth should be spent to improve its lifestyle?
  • Or should it be invested for the greater good of the community, towards a cause close to the family’s heart?

Remember that money is a means, not an end. There is always a greater purpose for families and for wealth. How would you like your family’s financial story to end?

 

Clarification on these issues within your own mind is important, because you will be bombarded with competing ideals when you have your first family discussions about money. Also, encourage  each family member to work through a similar process and record their thoughts.

 

COMMUNICATION

 

Now that you have your written thoughts in hand, turn your attention to communication, which is the second phase of family money handling.  Communication is not a one-way street, it’s a traffic circle with multiple lanes of traffic, people entering and exiting at different intersections, and everyone paying close attention to avoid a crash! Yielding and merging are equally important as you listen and share. When the conversation begins, no one should feel strong-armed to change their opinions simply to please a strong-willed family member.

 

The gathering of family to talk about money should be thought of as a meeting of management. As managers, each person must understand the policy and procedure for the company, as well as the letter and intent of the law. The goal of this meeting is to encourage open and comfortable family communication. It should not be about following someone’s printed agenda or a predetermined time frame. Clarification and communication go hand-in-hand. Don’t set boundaries. Create a relational environment. Work through clarification as part of the communication phase of the meeting(s).

 

Most families hate the thought of open dialogue on the topic of money! They believe conflict will result. Often they are right. This potential for conflict is not a good enough reason to abandon the discussion of a money handling plan.

 

Conflict might just be what the doctor ordered. We can easily spot the flaws of another person’s plan or life, while being nearly blind to our own shortcomings and failures. If the fear of dialogue is too great, this might be the right time to hire a dispassionate outsider who can guide the conversation and ensure that communicative goals are met.

 

COMMITMENT

 

Once you have taken the time to clarify what you believe, and worked through the often painful communications of your ideas, the family must reach the commitment stage of money handling. Conversation and meetings can only take you so far. The true test of clarification and communication is what you actually do about them. Rah-rah meetings and white board promises are not enough.

 

Now is the time for action. Walk it out. Talking about ideas won’t get them done. Words must be matched by actions. This leads to leaving a legacy your family can really take hold of.

 

Without commitment, your words ring hollow and empty. Promises seem broken. Wounds are opened and families are driven apart. However, with commitment, a wellspring of unity is born. Families are brought closer.

 

The development of your family stewardship plan must be a joint creation of all branches of the family, not a mandate handed down by the matriarch or patriarch. In order for a “money plan” to pass from generation to generation, it must acknowledge that children become grownups and eventually leaders.

 

Money planning must celebrate the calling and unique personality of each person. Its ideas must embrace eccentric interests because at some point these will be involved in setting the tone of family decision making. 

 

Musicians define harmony as the unity of coordinated notes. In business, do not confuse unity for uniformity! People will never be identical. Family money planning is not about marching everyone to the beat of the same drummer. Individuals must follow their own dreams and goals.

 

A well developed money plan illustrates and records the family’s belief about the purpose of their money. This plan serves as a foundational tool to help the family understand the achievement, maintenance, deployment, and conversion of money management.

 

As you work through clarification, communication and commitment to a family money management plan you will create a lasting legacy to inspire future generations of your family.  Given what’s at stake, it’s critical that you understand what your family believes about money handling.

 

As you prepare to handle this difficult subject, be ready to be challenged and inspired. Achieving family money harmony isn’t easy, but the result is worth its weight in gold.

 


Possible Discussion Topics For Your “Money ” Meeting

  • Review the basic purpose of your business.
  • Examine your policies for business expansion and taking on debt.

  • Look at your succession planning and its timing.
  • Salary policies for family members, non-family members, active/non-active family members.
  • Critically review your decisionmaking rules for saving and spending in  day to day business operations, emergencies,  major expansions, etc.
  • Develop a transparent system for getting family money issues and disputes out in the open and resolved.
  • Review of exit strategies and cash vs. stock buyouts of non-active members.
  • Charitable giving.


David Lively, artner at The Lively Merchant, has over 20 years hands-on experience inp the home furnishings industry, from the warehouse to the sales floor to the boardroom. He has walked the walk and talked the talk from the family-owned, single-site store to the multi-state, multi-million dollar operation; from sales training to computer programming; from warehouse construction and operations to financial management; from new store construction to complete renovation. Twice named to the "Beyond the Top 100" list of independent retailers and 1997 "Ohio Retailer of the Year," David's wisdom was won on the front lines of a furniture store and his battle scars have given him compassion for counseling today's retail warrior. David’s  experience has led him to address the issues of the transfer of authority, responsibility and wealth from one furniture store generation to the next. The surviving legacy of your family business depends on your plan for transition, and David has developed a system for helping to identify goals, strengths and opportunities during this crucial time.

 

Read more of David Lively’s articles for family furniture businesses on the furninfo.com website. You can reach David by calling 740.415.3192 or email him at  davidL@furninfo.com.

 

David has offered  free phone consultations to any FURNITURE WORLD readers who would like to talk about topics related to family business transition.

 


David Lively, partner at The Lively Merchant, has over 20 years hands-on experience in the home furnishings industry, from the warehouse to the sales floor to the boardroom. He has walked the walk and talked the talk from the family-owned, single-site store to the multi-state, multi-million dollar operation; from sales training to computer programming; from warehouse construction and operations to financial management; from new store construction to complete renovation. Twice named to the "Beyond the Top 100" list of independent retailers and 1997 "Ohio Retailer of the Year," David's wisdom was won on the front lines of a furniture store and his battle scars have given him compassion for counseling today's retail warrior. David’s experience has led him to address the issues of the transfer of authority, responsibility and wealth from one furniture store generation to the next. The surviving legacy of your family business depends on your plan for transition, and David has developed a system for helping to identify goals, strengths and opportunities during this crucial time.
Read more of David Lively’s articles for family furniture businesses on the furninfo.com website. You can reach David by calling 740.415.3192 or email him at davidL@furninfo.com. David has offered free phone consultations to any FURNITURE WORLD readers who would like to talk about topics related to family business transition.

View all articles by David Lively

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