Can Your Family Sustain Your Business?

This article was originally featured in Fast Company.

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After many years of counseling entrepreneurs and business owners, and of traveling my own entrepreneurial journey, I’ve distilled three core principles for founders and families that stand the test of time, regardless of how much money you have, how you acquired your wealth, and what your concerns for the future might be.

These three principles are:

1. Don’t mistake wealth for legacy.
2. Distinguish between your business and the business of your family.
3. See the world through the next generation’s eyes.

It’s uncanny how consistently my team and I are able to map the challenges facing each of our clients to at least one of these principles.

In an effort to unpack how the principles manifest in real life, let’s walk through them from the perspective of one of our clients: seven second-generation owners of a family-owned construction supply holding company based in Atlanta. The salt-of-the-earth patriarch founder, who built the business from the ground up, has passed away. When we met this family, the third generation had begun to enter the successful business, and the second and third principles were begging to be explored before the first could ultimately be addressed.

‍1. DISTINGUISH BETWEEN YOUR BUSINESS AND THE BUSINESS OF YOUR FAMILY

For so many entrepreneurs and business owners, particularly those who have a generational stake in the company, this principle is the hardest to live by. As entrepreneurs, we live and breathe our businesses, and it is integrated into every aspect of our lives.

In the case of our example family, each member possesses an incredible work ethic and a generous community spirit, but their ability to manage their family’s holdings and related wealth was always hampered by a sincere but misguided idea. The family patriarch had created a plan for generational transfer of the company and its assets that was completely equal in theory, but inherently unfair in practice.

Let me explain.

The second generation of this large family spans decades, with the eldest close to retirement and the youngest just coming into his own as a leader. Complicating matters, when we met the family, there was no framework to dictate how new generations would enter the business. They just couldn’t separate the business and the business of the family, and it was causing a lot of friction.

2. SEE THE WORLD THROUGH THE NEXT GENERATION’S EYES

We understood immediately that the family and its holdings would be the ultimate test of the second principle, largely because the patriarch didn’t have the foresight to consider the third principle: seeing the world through this next generation’s eyes. While those of us who start companies often dream of passing our businesses down through the generations, rarely are we able to anticipate and mitigate all of the potential complications that may emerge in the future.

In this case, the solution was simple, but executing it was infinitely more complex. At the heart of the conflict was the notion of equality, which needed to be reframed as fairness. In other words, ownership, compensation, dividends, leadership opportunities—all of it—needed to be based on what each individual was contributing rather than their birth order.

Via a series of ‘courageous conversations,’ the family co-created a set of values to live by and some rules of the road that have now become institutionalized in the business and with the family. The arrangement is flexible enough to allow family members the option to keep their investment and pass it down to their children, or to negotiate a sale of their interest, depending on their specific goals. We were also able to bring internal practices like compensation in line with fair market considerations, establishing a road map for how the third generation can enter the business.

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3. DON’T MISTAKE WEALTH FOR LEGACY

In the case of our client, a legacy—once assumed—had to be redefined. Many entrepreneurs believe that the mere existence of a thriving business and financial success guarantees a legacy. But legacy is not what you leave to someone. It’s what you leave in them.

Wealth can be measured. Legacy is lived.

What this family came to realize—and what so many entrepreneurs overlook—is that legacy demands structure. Without clarity around roles, responsibilities, values, and vision, wealth can become a source of confusion, resentment, or entitlement.

The best legacy a business owner can leave is not just financial—it’s strategic. It’s a set of ideas and practices that equip the next generation to lead with integrity, clarity, and cohesion. In this family’s case, that meant building governance frameworks, defining contribution-based ownership models, and preparing heirs to understand that stewardship is earned, not inherited.

CONCLUSION

When you separate the family business from the business of the family, and begin to see the world through the next generation’s eyes, you open the door to something rare: a legacy that endures.

These three principles—so simple in theory, yet so transformative in practice—have guided dozens of families toward greater unity, clarity, and success. They are the foundation of what we believe is the future of responsible wealth stewardship.

In the end, your business may create your wealth. But it’s your values, your vision, and your willingness to have the hard conversations that will determine your legacy.

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