Family Business Director

Corporate Finance & Planning Insights for Multi-Generational Family Businesses


Planning & Strategy

A Tale of Two Shoes

The contrasting fates of shoe brands Hoka and Allbirds in recent years have provided a couple important lessons for family business directors. As part of its growth strategy, Hoka harnessed the value of scarcity. Allbirds, on the other hand, stumbled by losing sight of its core customer in the race to pursue continued topline growth. In this post, we review these contrasting narratives to help family business directors evaluate their own growth strategies.

Earnings Season

As the U.S. enters another earnings season with anticipated profit drops, family businesses are encouraged to leverage these reporting periods for enhanced internal communication and strategic planning. Unlike public companies focusing on quarterly results, family businesses prioritize long-term decision making, but can still improve shareholder relations by consistent, contextual, and future-oriented reporting. Family businesses should identify if they are in a “planting” or “harvesting” phase, as it may significantly influence their growth strategy and investment decisions.

Capital Budgeting Shareholder Engagement

Lessons from the Oracle of Omaha

Warren Buffett is regarded as one of the world’s preeminent investors and most shrewd businessmen. Buffett and his partner, Charlie Munger recently drew thousands to Berkshire Hathaway’s annual meeting in Omaha. Buffett’s 2022 shareholder letter analyzes the company’s strategy, performance, and vision for the company going forward. This year’s letter provides several lessons for investors and family businesses alike. 

Capital Structure

Book Review: The Psychology of Money

In “The Psychology of Money,” Morgan Housel challenges the conventional view of financial decisions being purely data-driven. He emphasizes the role of luck, risk, and adaptability in financial outcomes. His lessons include the importance of recognizing risk and luck rather than skill, focusing on broader patterns rather than individual cases, and maintaining adaptability in long-term financial planning. This analysis provides a fresh perspective on managing family businesses and reshaping financial decision-making.

Shareholder Engagement Special Topics

A Lifelong Succession Plan

Lessons from the Arnault Family

Bernard Arnault, founder of LVMH and the world’s wealthiest person, is meticulously planning the future of his luxury empire. Through a blend of creativity and pragmatism, Arnault has built LVMH into a global powerhouse while maintaining its status as a family business. Learn how the “Wolf in Cashmere” has prepared his children for leadership roles, and the Arnault family’s approach to long-term planning, stewardship, and collaboration.

Shareholder Engagement Special Topics

Corporate Finance in 5 Minutes

New Video Released on Family Business On Demand Resource Center

Looking to unlock the secrets of corporate finance in just 5 minutes? This concise and engaging video will demystify the world of finance, providing you with an essential understanding of key concepts and strategies. Perfect for aspiring business leaders, entrepreneurs, or anyone looking to expand their knowledge, this video will give you the background you need to understand financial business decisions made by your company’s board and directors.

200-Year History: Family Business Lessons from an American Icon

A recent Barron’s article on the link between Elon Musk, corn, and John Deere piqued our interest. Enduring almost 200 years as a company compelled us to dig a little more. The present firm, Deere & Company (NYSE: DE), was incorporated in 1958. The company had five generations of Deere family leadership until the early 1980s when non-family members took the driver’s, or tractor’s, seat. The road from steel plows to $500,000+, 60,000-pound behemoths had its share of droughts and plentiful harvests. But what can family businesses take away from this American icon? We see two lessons: be open to seeking non-family members to run your business, and don’t be afraid to be a fast follower.

Special Topics

(More) Lessons for Family Business Directors

From the Failure of Silicon Valley Bank

The failure of Silicon Valley Bank will be talked about for years. What really happened? What caused SVB to fail? Was it just the long-term Treasury securities that everyone has talked about? Well, no. SVB was on a self-imposed path to destruction that had been waiting for an adverse change in the economy or a rising interest rate environment to kick it into oblivion.

There are, indeed, lessons for family business directors from the failure of Silicon Valley Bank. In this week’s post, we discuss four.

Special Topics

Down, But Not Necessarily Out

In this week’s post, we attempt to divert your attention from interest rates and banking crises by looking at recent private company transaction multiples and some implications of these measures.  As detailed in the latest edition of “Mercer Capital’s Middle Market Transaction Update,” transaction activity, both in terms of deal values and volume, ended 2022 with a thud, as expected.  Multiples on deals across all size tranches in the middle market (which we define as deals with total enterprise value between $10 million and $250 million) fell to close the year—implying a broad decline in private company valuations in that time.  However, asset prices across most classes were susceptible to these declines, creating opportunities for prudent family business managers and directors to evaluate potential transactions in a “down” market. Family business owners should not bury their heads in the sand regarding the current environment–one of the most important facets of a successful transaction is that sellers have reasonable and informed expectations of what their business may command in the market. These reasonable and informed expectations are difficult to develop without a solid understanding of current market conditions for privately held businesses. 

Special Topics

Unpacking the Corporate Transparency Act

On January 1, 2021, Congress enacted the Corporate Transparency Act (the “CTA”) as part of the Anti-Money Laundering Act of 2020. The main purpose of the Corporate Transparency Act is to protect the United States financial system from being used for money laundering and other illicit activities. Effective January 1, 2024, the CTA requires a range of different entities to file a report with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”). The CTA regulations are written so broadly that nearly every family business in the U.S. will be swept under this new law.

So, what does that mean for business owners? In this week’s post, we answer the main questions stemming from the Final Reporting Rule of the Corporate Transparency Act that will most likely affect you and your family business. 

Special Topics

SVB and Three Family Business Lessons

California (Bank) Dreamin’

Silicon Valley Bank (SVB) imploded last week in a “gradually, then suddenly”’ fashion. Regulators stepped in quickly and aggressively, promising to back up deposits at the bank of the VC world and stave off a contagion of fear at other banks. And while the body was still warm, politicians stepped in and dusted off their 2008 talking point notes.

This post from Family Business Director aims to highlight three relevant family business lessons from the failure of SVB: diversification, succession planning, and keeping a long-term focus.


A Little Planning—A Lot of Tax Savings

Charitable Giving Prior to a Business Sale

Over the last few weeks, I’ve had both professional and personal conversations with family business owners who utilized a business transaction to maximize their charitable giving and minimize their tax burden. While taxes are not generally the primary driver in making large gifts to charity, a little foresight and planning can create flexibility in your giving, yield more bang for your buck, and result in fewer taxes owed to Uncle Sam. In this week’s post, we discuss the tax strategy that charitable family business owners should keep in mind when selling their business.

Capital Structure M&A

Out to the Public and Back Again

The Weber Grill Case Study

A recent Wall Street Journal article highlighted the trend of newly-public companies reverting back to private ownership after a very short time in public hands.  Among the boomerang IPOs mentioned in the article was that of backyard grill maker Weber.  With the advent of grilling season, we were curious about Weber’s experience in the public markets and any lessons that family business directors might be able to draw from the tale. Among the lessons available for family business directors from the tale, we will focus on two for this post.

Special Topics

Review of Key Economic Indicators for Family Businesses

In this week’s Family Business Director post, we look at a few key macroeconomic trends that developed in the fourth quarter of 2022 and early 2023 and their impact on family businesses. In the final quarter of 2022, the effects of the Fed’s rate hiking campaign began to permeate throughout the economy, particularly in inflation readings. Still, GDP outpaced consensus estimates, and U.S. equity markets reacted positively to signs of slowing inflation in October and November.  The Fed continued to raise the benchmark rate with a 75-basis point increase in November and a 50-basis point increase in December.  This post provides a brief look at these trends. 

Special Topics

From Unfriended to Best Friends Again?

Attaining Efficiency Through Restructuring

Facebook, now known as Meta Platforms (NASDAQ: META), released fourth-quarter earnings and full-year 2022 results earlier this month.  The stock is currently trading at its highest level in the last six months, albeit still at relatively low implied valuation multiples. This comes after a notably tough year for Facebook, as its stock fell 64% last year due to heightened competition from TikTok and a slump in the digital ad market.

So, what changed?  The two main changes for this significant increase are cost cuts and the announcement of a $40 billion increase in their share repurchase authorization.  While Meta previously taught us about long-term planning and plant/harvest decisions, Facebook’s belt-tightening and share repurchase plan bring up another few lessons on forecasting and share repurchasing, which we revisit in this blog.


6 Valuation Principles You Should Know

New Video Released on Family Business On Demand Resource Center

Family business directors and shareholders do not need to be valuation experts.  However, there are six basic valuation principles that can help directors and shareholders make better long-term financial decisions for their family businesses.  In this video, we identify and explain these six principles, which are great additions to your family business toolbox.

The 84 Lumber King

Succession Planning and How to Find Your Next Leader

84 Lumber is a family-owned private company. It operates more than 260 stores, component manufacturing plants, custom door shops, custom millwork shops, and engineered wood product centers in 35 states. Joseph A. Hardy III, the founder of 84 Lumber, lived an interesting and flamboyant life. The business is run now by Hardy’s youngest daughter, Maggie Hardy, who serves as president. A Wall Street Journal article on Mr. Hardy detailed his life and, given his recent death, also reminded us about the “next man (or woman) up” dilemma for many businesses. Who will ultimately take the reigns—especially following a larger-than-life founder?

Capital Structure

Southwest Airlines Meltdown and Your Investment Decision

Come Fly With Me (Soon?)

Last week, Southwest Airlines experienced significant disruptions and canceled thousands of flights following a winter blast smacking a large swath of the country. Underinvestment in system-critical operations was a key culprit, and it reminded me of the “Invest or Not to Invest” decision that faces family businesses. What investment decisions could Southwest have made before the crisis? And, what about your business? How do you make rational investment and capital expenditure decisions? Do you acquire a new business or modernize? What is a good investment?

In this post, we discuss two key areas to address these questions: how to identify investments available to your business and how to evaluate your available investment opportunities.

And, if you traveled during the storm, we hope you made it to your destination and home.

Performance Measurement

What Is on Your Family Business Box Score?

A question for you and your board, what is on your family business box score? When the lights are still on and things are stable, it can be easy to continue with business as usual and not look too closely at key return metrics. Creating a box score, and maybe more importantly, updating it consistently, can help prevent complacency.  Establishing fundamental metrics important to your business and benchmarking your performance to peers or ‘opponents’ can help quickly convey how the family business is doing to you and your shareholders. In this week’s post, we consider three metrics for your family business box score.

Special Topics

Is Your Family Business Ready for the Next Recession?

A Look Ahead to 2023

As we begin to put a bow on 2022 and turn our attention to 2023, we suspect that the dreaded “R word” is on the mind of many of our readers as they contemplate the myriad challenges and obstacles their businesses will face in 2023. As a family business owner or director, now is the time to think critically about how your family business is positioned for a potential economic slowdown.  This post offers a few practical steps family business owners and directors can take to ensure their business continues to thrive even if Santa brings us a recession this year.

Dividend Policy Shareholder Engagement

Double Down or Cash Out: The Reinvestment or Distribution Decision

I recently got back from the AICPA’s Forensic and Valuation Services conference in Las Vegas.  While I came back richer in experience and CPE credit, the green felt of the blackjack table was less kind to my wallet. Matching your family shareholders’ growth objectives with their relative risk tolerance is a key directive for family business directors and one that is tied directly to what your family business means to you.  We highlight two corollary questions relating to growth, risk, and business meaning: investing decisions and distribution policy.

Special Topics

Something to Chew on This Thanksgiving

We have traditionally advised you about what not to talk about at the Thanksgiving dinner table, but this year, we thought we would highlight a more positive family business conversation that you might want to have with your family shareholders.

Special Topics

Review of Key Economic Indicators for Family Businesses

With economic data for 3Q22 beginning to trickle in, we look at a few key trends that developed during the quarter.  The tale of the tape in the third quarter was the same as it has been for virtually all of 2022—volatile equity markets, ongoing inflationary concerns, and rising interest rates.  In this post, we provide a concise and unbiased look at some of the manifested trends.

Consulting Services

Family Business Advisory Services

Mercer Capital provides financial education services and other strategic financial consulting to family businesses