One of the considerations for financial planning when it comes to a growing family is business development for your children. While many people will be thinking of the traditional path for their children, ie schooling, university, employment etc, there will also be many business owners who have aspirations for their children which includes their future involvement in their own businesses. As with any business owner one of the main considerations is the identification of key people to run the business and while there are many capable people who can do the job, as a business owner you want to ensure that you have the right person to do the job. In many cases this will be a family member because then the business continuity can be such that it gets passed from generation to generation provided the next generation is able to run the business well.
Running a business is not easy. The ability to run a business well is a skill that is acquired by business owners over their lifetime and it is not something that you get from the text books or a course. Yes there may be many courses related to business and each of these may be relevant in the academic material that the teach but when it comes down to it, business is very hands on and is practical in nature.
Early involvement of the children in the business gives them great exposure to the aspects of work that they may be faced with in the future. Let them see what kind of challenges that you as a business owner are faced with so that when they go through their studies they will know that life is not all about studies.
The value of a University Degree in this day and age is up for debate. While in the past a university degree could give you a headstart amongst your peers in the world of employment, in the current global environment there are so many degree holders and jobs to not go to those who have the best degrees or are the smartest. Lets face it, the jobs are going to the locations where they are cheap. Multinationals are managing their costs in this way. So if there is a shortage of jobs in your part of the world, one of your options is to do your own business.
If you are the business owner you will already know that the traditional definition of what your job entails is that you are responsible for everything. Yes, you may delegate functional responsibility to others to take care of their own areas, but ultimately as a business owner the overall responsibility lies with you. So if you want someone to take over, they better know what are the functions are that they will be overseeing
Finance is concerned with financial matters of the company. The reporting of financial performance, budgeting, management accounting and forecasting. The information that the finance department produce will be important for the financial management of the company and strategic decision making. Things like cash flow management, treasury, ensuring the company has sufficient liquidity and raising of finance
As the company grows you will be employing people. The HR function will be responsible for all matters relating to the hiring and retention of staff. Including interviewing, setting the policies for employees, ensuring their well being etc. Staff also need to be trained and developed and it will be HR responsibility to ensure they are kept up to date and relevant so that they can perform their duties well
If your company cannot retain employees then you as a business owner have a problem because you cannot function without employees. The employees need to be paid on time too so the HR function includes a lot of admin to ensure things run properly
Sales and Marketing are concerned with the business or revenue generating side. Your marketing team are tasked with the generation of awareness of your products and services. The sales team will be the customer facing part of your business. They will be the ones getting the orders and generating business for your company.
The examples above are just some of the broad functions of running a business. While each function is distinct, the actual management and running of the business pulls all of this together and ensures that each department works in a coordinated way. As a general manager you need to know what is going on in all areas of the business.
If you have aspirations of your child going into your own business it is important that they are exposed to it so that they know what it entails. There is no right time to do this but it would be good for them to know about it as early as possible so they can develop an interest in it.