When a family enterprise is created, it starts with the entrepreneurial founder (s) who have an idea and a vision. A small business evolved after hard work, sacrifice, and mistakes along the way. They invested and grew the company, leading to an established, structured entity. But businesses need to change over time to meet challenges, expand into new markets or products, seize new opportunities or make an existing product better, more relevant, or attractive for the prevailing market. How can prior generations instill the entrepreneurial spirit into the next generations? The answer is an intentional plan to develop the upcoming leaders, an educational strategy.

To break the cycle of "Shirt Sleeves to Shirt Sleeves" in three generations, as discussed in a previous blog, family businesses and those wanting to pass along wealth must stop the current way of managing money.  A 70% failure rate in a successful transfer of wealth is not good odds.  Financial planning should not begin with wealth advisors but with a family bank structure.

After reading a chapter from Caroline Coleman Bailey's book, "Rooted in Family," I contemplated her chapter, which discussed working for their family business. As a third-generation Gallo family member, Caroline broke away from the family business after an eighteen-year successful career. She decided to find her path in life. But what did that mean?

The chapter's name, a metaphor, “under the shade of the family tree,” struck me as profound. To me, family means everything. A tree gives one root. The older the family, the stronger the tree's roots. We have a black walnut tree outside of our family house, Belle-Hampton, probably over 250 years old. Just like our family history, it is solid and majestic but needs to be nourished and protected to continue to grow. However, an individual branch can be propagated from the long-established shrub.

Those majestic trees that have been around for 140-160 years during historical events are called "witness trees." To qualify for the official naming and protection, they must be on former battlegrounds. Although there may have been family "battles" on our property, Belle-Hampton, we have a black walnut tree estimated to be about 200 years old. It had witnessed family events since 1826, when the Main House was first established. As owners, we are the 7th generation raising cattle on the property. The tree has seen the earlier proprietors' births, weddings, and deaths—all of the family celebrations and the workings of the family business. As we construct our 250-year plan, we first look to the witness tree for perspective.

When I was entering college and deciding on a major, I received guidance from my dad that I should always include business lessons no matter what I choose.  Great advice for any young adult, but especially true if they are part of a family business or stewards of family wealth.  As we sat down with our children during a family council meeting, some members realized their shortcomings of lacking knowledge about balance sheets and cash flow statements.  What should the education criteria be for family members responsible for managing family wealth in the future?

When planning for future endeavors, you first have to know yourself and where you are in life in order to see what is next. What are your strengths and your skills? What makes you unique? How do you think others see you? A simple exercise is to text 3-5 people and ask them to send you a few words they feel best to describe you. Explain to them you are creating your vision and need to get an accurate assessment of yourself. Once you have received the adjectives, take a blank sheet of paper and write a description of yourself.

When I was growing up, weekends and holidays were spent at our family business.  Through that, my parents taught us the value of hard work, customer service, and sound financial practices.  The company became very profitable, which then required some other investments.  My uncle, a real estate attorney, recommended purchasing land and a cottage on a lake in northern Wisconsin.  A beautiful setting perfect for a relaxing family getaway and a chance to bond.  Although I believe in the value of investing in real estate, this wasn’t the best thing for our branch of the family.

The Mickey Mouse Fan Club became a rage in the late 1950s, where they popularized the term Mouseketeer.   Walt Disney himself spoke as Mickey Mouse in each episode.  Mickey, the character, made his debut significantly earlier in 1928.  Now, Disney’s following is even more extensive.  If you log onto Twitter, Disney has 7.2 million followers, while on Facebook, they have 52 million.  Their tag line, "Disney magic right at your fingertips."  They continued with Walt’s philosophy that the magic is inside each of us. The Walt Disney World's guiding principle is to create a culture of magic in the company.  But how can your company include magic as a goal?