Friday, February 11, 2011

Ideas for structuring a family agency - by Dan Mangus

With a family business it is very difficult to manage those we love, so it is very important to put accountability measures in place. The best way I have found to handle the situation is to form a "Department" for each individual.

Example: The Department of Dan Mangus.
I would have a percentage of the business that I was accountable for. The Department would have X # of clients. The Department would set production goals. The Department would be responsible for their percentage of operating expenses. The Department would report each month on it's status of profit and loss.

If the Department was being compensated on a percentage of commission and they were not able to meet their portion of expenses then the commission percentage would be reduced to recoup the funds for the agency.

Example: On a 60/40 split it may be changed to a 50/50 split until the department balances again. A semi-annual review of fixed expenses could be done to adjust for change in department requirements.

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