For the business with the family name on it
Somebody built this with their hands. Their name is on the truck, the sign, or the door. The business pays for the house, the kids' school, and Sunday dinner. It is also the retirement plan, whether anyone has said that out loud or not.
That is a lot to carry on a set of books that were built for year-end filing and nothing else.
We work with family-owned and founder-led businesses doing $2M to $50M. Contractors, practices, shops, farms, and the second-generation operators who took over something built before they were born. The work is the same as everywhere else we go: clean books, cash you can see, and decisions made with real numbers. The difference is that in a family business, every money conversation is also a family conversation. We know that going in.
The questions we hear from family businesses
- "We pay ourselves whatever is left. Is that right?"
- "My brother runs the field and I run the office. Neither of us really knows the margin."
- "Dad still signs the checks. How do we move that without a fight?"
- "We have never known what this business is actually worth."
- "The kids may not want it. What then?"
- "Mom's car is on the books. So is the lake house. Does that matter?"
Every one of those is a numbers question wearing a family question's clothes. We answer the numbers part plainly and leave the family part to the family, with a clearer picture to talk from.
Paying the family, and keeping the business separate
Founder-led businesses blur the line between the household and the company. Personal expenses drift through the business account. Family members are on payroll at rates set years ago. The owner takes draws instead of a salary, so nobody can tell what the business earns on its own.
None of that is a scandal. All of it hides the truth.
We rebuild the chart of accounts so the business shows what it earns before the family takes anything. Owner pay becomes a line, not a leftover. Family members on payroll get a market rate on paper, so the margin you see is the margin a buyer or a lender would see. Personal items get their own place, tracked, not buried.
Then, for the first time, you can answer the question every family business owner eventually asks: what does this thing make?
Cash you can see
A family business runs on trust. The bank balance is the report. That works until it does not: a slow quarter, a big job that pays late, a truck that dies in the same month as the insurance renewal.
Every Clarity engagement starts with a 13-week cash flow forecast, updated every week. Thirteen weeks is long enough to see the next quarter's pinch and short enough to be accurate. It is the difference between "we should be fine" and "we are a full payroll short in week nine unless the Henderson job pays on time."
That forecast becomes the family's shared view. Not one person's gut. The whole family looking at the same thirteen weeks.
Who takes it over, and are they ready
The often-cited figures are that about 30 percent of family businesses survive into the second generation and about 12 percent into the third. The numbers come from research by John Ward at Northwestern's Kellogg School and are repeated by the Family Business Institute and the Conway Center for Family Business. People argue about the exact percentages. Nobody argues about the direction.
Most of those businesses do not fail because the next generation is incapable. They fail because nobody put numbers on the transition. What is the business worth today? What does it need to be worth by the handoff? Can it pay the parents what they need and still fund itself? Is the daughter taking the keys walking into a business she can see, or one she has to guess at?
Succession work is Transaction plan work. Valuation. A transition plan with dates. The structure, gift or sale or a mix, worked out with the family's other advisors. And a set of books the next owner can actually run the business from.
If the kids do not want it, that is a different conversation, and an honest one. A sale to a key employee, an outside buyer, or an ESOP each has a number attached. We help you see all three before you pick.
About 30 percent of family businesses survive into the second generation, and about 12 percent into the third.
Often-cited figures from research by John Ward, Kellogg School of Management, repeated by the Family Business Institute and the Conway Center for Family Business.
How we work with family businesses
Foundation: books, clean and closed monthly, with the family and the business finally separated on paper.
Clarity: the 13-week forecast, a one-page KPI report the whole family can read, and written CFO notes every month.
Momentum: the budget and forecast model for the next location, the next hire, or the next generation's first year in charge.
Transaction: valuation, succession or sale, ESOP feasibility, and the lender package if the handoff needs financing.
Every engagement starts the same way: a discovery call, an agreement in writing, and a 90 day onboarding plan that begins with an on-site visit. We want to see the shop and meet the people whose names are on it. See how we work. Compare the plans.
Common questions
Do you get involved in the family side of decisions?
No. We put the numbers on the table clearly enough that the family can decide. Who takes over, when, and on what terms is yours to settle. What the business earns, what it is worth, and what a plan costs is ours to show.
The founder is still active and does not love outsiders. How does this go?
We start with a discovery call and an on-site visit before anything else. Most founders come around when they see their own numbers laid out plainly for the first time. If the fit is not there, we say so.
Can you pay family members fairly on paper without changing what they actually take home?
Yes. The goal is a set of books that shows a market-rate cost for every role, so the margin is real. What the family decides to distribute on top of that is a separate line and a separate decision.
We are years away from any handoff. Is it too early?
The earlier the better. Succession planning that starts two years out is a sale under pressure. Five years out is a plan. Even if nothing changes hands for a decade, a business run on clean numbers is worth more and easier to hand over.
Do you work with the second generation directly?
Often. The person taking over usually wants the numbers their parents never had. We build the reporting for the business as it is today and teach the next owner to run it.
See if we are a fit.
For related work, read about farm succession, financial work for home services, or how clean bookkeeping supports the next decision.
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