Family, Business and Finance

Posted Monday, May 18, 2015 Comments (0)

With the 2015 Federal Budget upon us this evening and the new tax cuts for small business, I thought it timely to share my thoughts, feelings and experience on family business and of course finance matters. 

I come from a large family, one who has been in the property and construction industry for just over 40 years. My wife comes from large family also and they have lived and breathed family business and its ups and downs for over 48 years. Usually people may say family and money do not mix, that it creates a complexity which impacts both positively and negatively on family relationships. 

However, it also creates positive energy, as you have people with common goals and deep understanding (and hopefully respect) for each other and in their roles within the business. The saying “the whole is greater than the sum of its parts” I think can be true in many family enterprises. 

What I have learnt from my family business experience is that clarity of roles, communication, strategy and goals is paramount. 

When it comes to finances for family business, always be clear upfront before embarking on any funding about what the risk are to each party. Typically, the banks will try and tie everyone in and cross collateralise properties and business to make it easier for them. My advice – DON’T DO IT! It may be easier to start with but it will become a massive headache down the track. 

I have seen firsthand over the past year how this can create significant problems for families – who for many years have blissfully put it all into the one basket for their Bank, only to find out when the time comes for support or resolving family business issues, their hands are tied. 

I genuinely believe we are at the start of a new generation for Australia – one that small business and family business will be the key driver of wealth creation going forward. No longer will being an employee or a passive investor in property or equities over the long term create independent wealth. Rather it will be the people who back themselves in business who prosper once again and reap rewards of hard work. The change in the federal budget in helping small business is one small step in that direction. 


Paul Buckle is a Partner at Balmain Commercial Brisbane
Email Paul: pbuckle@balmain.com.au
Linkedin: https://au.linkedin.com/pub/paul-buckle/70/298/337

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