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Charters help steer

Hamish Pryde • July 16, 2012

But in most cases the family business you so lovingly established and nurtured will only continue to succeed if everyone else in the family knows what the business is about, why you started it and what the objectives are.

Too often family businesses in New Zealand do not survive through to the second and third generation.  Conflicts are common and, in addition to inadequate planning, often lie at the heart of the relatively high failure rate of small family businesses.

You need to define and explain your business so your children and other family members understand and appreciate the reasons for the sacrifices being made in the quest for ongoing business success. 

The family business charter, or constitution, offers a good way to do this.  It is a mechanism to assist the family in achieving its objectives.  If you have not written one already for your family business, now is a good time to start.

 

State your dream at the beginning

Ideally a family charter is written when you are forming the business.  That is when you state your dream, what your objectives are, and how this business will deal with pertinent issues relating to external management, family disputes, succession and so on.   The constitution would outline:

The objectives of the family.

How the objectives interact with the business plan for the family business.

How to deal with family disputes.

The succession plan for the owner â€" both short term, in the event of an unforeseen circumstance, and long term; relative to retirement planning.  

Management issues and the family's position on employment of external management personnel and external directors.   

The appropriate standards of performance and administration for the family business.  

A standard of conduct and commitment of family members to the business.

Ongoing management training and skill development necessary for family members to enable them to progress in the management of the family business.

How regular family meetings are to be held.

 

By Hamish Pryde September 11, 2024
Paper is everywhere. We spend a lot of time and money moving paperwork around. But with today’s technology it is now possible to get rid of paper entirely. Digital documents are simpler, easier to store and send, more searchable and permanent. How long does it take to post a document to somebody via the ole stamp and envelope method, that is snail mail? It is more efficient and timelier to email the document. How many times do you go to print a document at home and find that your printer has run out of ink? Why do we still hold onto printing paper documents? Sometimes it’s just because that’s what we’ve always done and let’s face it change can be difficult at first. Paper alone is cheap. But when you start paying for printers, toner, servicing and maintenance, paper starts to look more expensive. Let alone the storage cost. Paper tax records for seven years can be quite a few boxes of paper. We have embraced some paperless technology as part of a modern business practice. This includes digital signatures, digital collaboration, paperless minutes of business improvement and coaching meetings, electronic work papers and my new digital notebook which I am enjoying. We send questionnaires via email to you to gather vital information to enable us to prepare your annual financial statements. This is a PDF document. Instead of printing the questionnaires you could save the document down into a folder of your choice then edit the PDF document and return to us. How do you edit a PDF document you ask? Once you have opened the document the Adobe online editor lets you do some things for free. The online editor works in any web browser and lets you add text, sticky notes and highlights. Click on the fill & sign button to the right of the document, then in the top toolbar click Iab text button. You can add text directly on the PDF document. Have a try next time you have a PDF document open. Xero and Farm Focus users can attach invoices directly to the transaction loaded into Xero. Then if you are looking at the rates expense in the profit and loss account or farm working account, you can drill down into the rates code and see the transactions. Then attached to each transaction is the rates invoice if you use this great functionality. All invoices can now be stored in the cloud. So why paperless? Productivity - electronic documents are instantly and simultaneously available to everyone who needs them. Reduce waiting times with less risk of loss or damage. Cost savings - you will save money on printing, postage and associated costs. You could pay less rent because you won’t need all that space for your files. Security - electronic documents are more secure than printed ones. Digital records can be password protected and rendered unreadable through encryption. Printed documents are only as secure as their proximity to a copy machine. Reduced Clutter - paperwork on desks and shelves are not only untidy it’s inefficient too. The organisation of digital files is simpler and your office will look much neater. That will help you clear your mind to focus on your business. Environmentally friendly - less printing means fewer trees cut down for pulp and less energy used to make and transport paper. Disaster recovery - if there is a fire or flood, recovery from the backup is much easier with digital storage them with paper. There are great help articles available in Xero or Farm Focus if you are not attaching invoices to payments already. To find out how click on the links below: If you would like to explore ways you can go paperless we can help.
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