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The Owner-Founder

Provided by the Business Families Foundation, Content Partner for SME Toolkit


The owner-founder is an entrepreneur who starts the business. Key characteristics are: entrepreneurial drive and spirit, charisma and vision and deep understanding of the business and its operations, including tremendous tacit knowledge over time about the company and the industry it evolves in. At the owner-founder stage, issues of overall control and ownership of the business often remain unspoken: who should own shares in the business in addition to the owner-founder? When should the estate be frozen to assess its value and the timing of transition of the business to the next generation? Should the business be sold? How to let go and renew oneself when the time comes for transition and succession in leadership roles?

Ownership at the owner-founder level creates a number of challenges within the family, such as: delegating and sharing power and authority in various areas of the business and the family; dealing with fair versus equal in terms of sharing roles, responsibilities and assets among family members; securing the future financial needs of the retiring owner-founder and the financial sustainability of the business(es).

The most important struggle for an owner-founder is the need to control versus the pressures to share control of the business. Another key concern the owner-founder faces over time is whether to sell the business or keep it and prepare it for ownership by future family generations. Selecting a successor or successors becomes a delicate matter as it often requires choosing one of the children or in-laws, and keeping the decision-making process focus on the individuals’ skills and competencies during this selection process. Last but not least, being a controling retiring leader versus a mentor and coach to the next generation of leader(s) will depend on the owner’s abilities and relationship with the successor(s).

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In summary, the owner-founder must understand that the dilemmas of: sharing leaderhip and power versus controlling, selling versus keeping the business for future generations, choosing versus not choosing a successor or successors, and mastering versus mentoring the next generation of leaders, will need to be addressed and dealt with at some stage in time.

In order to be in a position to articulate and address upcoming challenges that go beyond the typical business challenges of growth, competition, cash-flow management and so on, it is crucial to view the entrepreneur and his/her entrepreneurial dream, as early on as possible as a family enterprise venture (even when ownership is concentrated) rather than as a solo entrepreneurial dream. Therefore we understand that a family enterprise is a unique dynamic system comprised of family, business, and ownership sub-systems where rational decision-making processes and emotional pressures come into play.

Learn about other stages:

Back to the Different Types of Owners of the Family Business.

© Business Families Foundation 2016. All rights reserved.

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