Part of the process of drawing up such a plan should include concrete job and qualifications descriptions. While this is a fundamental part of any company's framework, it is crucial within a family business. Either way, they must be made. Such clear-cut arrangements help ensure that personal dynamics within the family system such as sibling rivalry, and resentment of authority, do not seep into the business system. These meetings serve as a forum to air feelings, hash out boundaries, and to clarify both professional and personal objectives and expectations.
Compensation can be an especially touchy area in family enterprise.
Overpaying can lead to assertions of nepotism from any non-family employees, and underpaying can cause family members to feel taken advantage of. Once the organization and business practices of a family enterprise are solid, there are good reasons keep it alive and flourishing such as retaining an income base for family members, and providing continuous and loyal service to the community. However, despite the fact that a significant portion of Fortune 500 companies are family operations, showing a great potential for success, studies show that a relatively small percentage of all family owned businesses will survive into the second generation. For the founder, it is important to anticipate any possible managerial and legal problems that may arise once the second generation takes over. It is also necessary to plan carefully for the transfer of stock and assets, so that the next generation will not be surprised by unforeseen taxes.