Category

Planning & Strategy

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September 28, 2020 Shareholder Engagement

How to Communicate Risk to Family Shareholders

Communicating risk effectively is a challenge for all companies.  Making too much of the risk can alienate customers and erode the credibility that might be critical when a threat actually materializes.  On the other hand, insufficient risk disclosure can result in liability that threatens the company’s existence.  A recent article in the Harvard Business Review addressed this challenge in customer communications.  The authors of “The Art of Communicating Risk” offer three suggestions for communicating risk to customers more effectively.  In this post, we will review those suggestions, and think about how they might apply to communicating risk to family shareholders.

August 31, 2020

Acquisition Strategies for Family Businesses

Casting a Wider Net May Reveal Attractive Opportunities in the Downturn

As we noted in last week’s post, directors should take this economic opportunity to think more broadly about the portfolio of assets owned by their family business. Are any pieces extraneous? Are there any pieces that are missing? For family businesses that have hesitated to make acquisitions in the past, the missing pieces do not have to be big, nor do they have to be existing competitors. In this week’s post, we offer five categories of targets we think would be helpful to expand your list of potential acquisition opportunities.

August 24, 2020 Current Events

Planning for Post-Pandemic Life for Family Businesses

Family directors have rightly been focused on keeping their people safe and healthy, and taking the steps necessary to help their businesses survive the pandemic.  It will eventually be time to look ahead, however.  When that time comes for your family business, what will you be thinking about? 

August 17, 2020

Estate Planning Opportunities in the Current Environment

This week our blog features a short (less than 30 minute) webcast that provides insight on the current opportunity to enhance the long-term sustainability of your family business.

July 27, 2020 Current Events Taxes

A 2020 Estate Planning Reader

Amid a Global Pandemic, It's Easy to Lose Track of Some Big Things That are Going On

In this week’s post, we have assembled some helpful resources we have come across that provide helpful insight on the estate planning opportunities and strategies available to family business owners during 2020.

May 11, 2020 Current Events

What Makes a Forecast Useful for a Family Business?

Family businesses devote time and resources to creating forecasts and budgets to guide resource allocation and strategy decisions. Yet, the forecasts and budgets for 2020 that many family businesses spent months creating are now worthless. So managers and directors face the task of revising and updating those forecasts amid a uniquely uncertain environment that the pandemic has caused. In this post, we provide some ideas of how to “loosen up” forecasting models to make them more useful.

April 27, 2020 Special Topics

The Family Office

Managing Family Wealth Since 27 BC

Educating your family about how your wealth and/or family business is managed is essential for the preservation of your family legacy. In this week’s post, we discuss family offices. Private investment office…  Family business advisor… Single-family office… The name differs and the definition varies greatly depending on whom you ask. But the concept remains the same. Wealthy families often seek assistance to manage their accumulated wealth, organize family affairs, and preserve capital for future generations.

April 13, 2020

When Is It Too Late to Plan?

Takeaways from Moore v. Commissioner

If the senior generation of your family business has not yet crafted their estate tax plan, today is the best day to start.  A new decision handed down from the Tax Court last week provides a timely reminder that the costs of procrastination can be very high.

March 30, 2020 Current Events

Looking Back to Look Forward

We are not economic forecasters, so we are not attempting to make any predictions about the coronavirus or its economic effects.  However, in an effort to provide some context for ourselves, this week we decided to go back and examine some data from the Great Recession.

March 16, 2020 Current Events Special Topics

Is Your Family Business Ready for a COVID-19 Recession?

The official end of the bull market for public stocks signals that Coronavirus-induced disruptions to the global economy are real and are expected to persist. The stock market tends to be the best leading economic indicator, so family business directors would do well to think about how best to position their businesses to weather the slowdown.

March 2, 2020

Is Your Family Business Risky Enough?

Family business directors should carefully consider how to integrate the risk of the family business with the risk of the family as a whole. Like their publicly-traded brethren, it may turn out that some family businesses aren’t risky enough.

February 17, 2020

When Is Our Next Turning Point Breakfast?

Is Your Closely Held or Family Business at a Turning Point and Do You Need to Talk?

In this post, Chris Mercer discusses a very important breakfast he had some time ago with a client and friend who is second-generation chairman, CEO, and lead family member of a very successful, third-generation family business. That breakfast served as a turning point for him and his business and the family.

February 3, 2020

Selling Your Family Business

When M&A markets are robust, as they are now, we find that some families start to think about selling the family business. There’s a good chance that families contemplating a sale have never sold a business before, and may not know quite what to expect. In this week’s post, we provide a brief overview of the steps involved in selling a business.

January 6, 2020

Five Questions Family Business Directors Should Think About as 2020 Begins

The new year provides a natural opportunity for family business directors to think about the current condition of their family business and ponder what the future might hold.  In this first post of 2020, we identify a handful of questions that family business directors would do well to think about.

December 16, 2019

Making It Through December

While its status as a Christmas song is perhaps debatable, Merle Haggard’s “If We Make It Through December” is classic country music at its finest.  The song captures the pathos of economic distress, with the recently-downsized protagonist lamenting his inability to provide the Christmas he wants for his daughter. Although we suspect Mr. Haggard was not writing in this direction, the song has always made Family Business Director think about breakeven analysis.  As the year draws to a close, family business directors naturally evaluate the firm’s profitability over the course of the year.  For some, profitability was assured months ago.  For others, it remains uncertain whether they will make it through December without incurring a loss for the year.

November 25, 2019

Top Ten Questions Not to Ask at Thanksgiving Dinner

For most of us, Thanksgiving is a time to disregard normal dietary restraint in the company of extended family members that one rarely sees.  For some enterprising families, however, Thanksgiving quickly devolves from a Rockwellian family gathering to a Costanza-style airing of grievances.  So, in the holiday spirit, we offer this list of the top ten questions not to ask at Thanksgiving dinner.  If you have trouble distinguishing between the board room and the dining room, this list is for you.

October 28, 2019

Lessons for the Long Haul

While public companies are planning for the next quarter, successful family businesses are planning for the next decade.  While private equity firms anticipate exit, successful family businesses anticipate transitioning to the leadership of the next generation.  A recent profile in the New York Times of Rumiano Cheese provides a great example of how family businesses persist and endure over generations.  Rumiano Cheese is celebrating its centenary this year, and the company’s story provides some great reminders for all family businesses that are in it for the long haul.

October 21, 2019

Questioning Your Family Business Balance Sheet

If the income statement is a movie that records how your family business performed during a particular period, the balance sheet is a snapshot that records what your family business looked like at a particular date. The balance sheet answers two core questions: “What are the assets our family business owns?” and “How has our family business paid for those assets?”
We’ll flesh out the first question in this week’s post, and turn our attention to the second question in a subsequent post.

January 14, 2019

Is Your Family Business Ready for the Next Recession?

Now is the best time to think about how your family business is positioned for the next recession, whenever it comes.  In this post, we review some ways family business directors can prepare their companies to survive (and perhaps even thrive during) the next recession.

November 12, 2018

AutoZone Provides Roadmap for Management Succession

The Founder’s Exit Doesn’t Need to Be the End of the Story for Shareholders

Management transition is a sensitive topic for many family businesses.  Founders of successful family enterprises are by definition exceptional individuals.  The challenge for family business directors is ensuring that the unique attributes of key managers contribute to the sustainability of the family enterprise instead of crippling the business through unhealthy over-reliance or dependence on a single individual. Pitt Hyde’s (AutoZone founder and long-time director) recently announced transition highlights three lessons for family business directors and managers.