Family Business Director

Corporate Finance & Planning Insights for Multi-Generational Family Businesses


Special Topics

Planning & Strategy

What We’ve Been Reading

How to get a non-family CEO and a family ownership team on the same page regarding financial goals, dealing with a family member who needs to step down from leadership, and the turnaround story of family-owned Radio Flyer are some of what we’ve been reading about as fall approaches. In this week’s post, we share a few interesting articles you and your family board members may enjoy.

2022 Benchmarking Guide for Family Business Directors

Making Sense of 2021

Benchmarking is a powerful tool for family businesses.  Done well, benchmarking provides managers and directors with valuable insight and context for evaluating the operating performance of the family business and the strategic investing and financing decisions made by their leaders. 

This blog post will summarize some of the findings in our 2022 Benchmarking Guide for Family Business Directors. 


Only 2% of Small Businesses Know This Key Fact

Do you know how much cash is on your family business balance sheet? How about receivable health and your debt position? Reading this blog, you likely answered “yes” to these questions.

Do you also know how much your family business is worth?

If you answered “Yes,” you are in a select company as 98% of small businesses polled by M&T Bank over the past two years didn’t know the value of their businesses. Knowing and understanding the value of your family business is essential to making critical decisions around dividends, capital structure, or capital budgeting that have long-term effects on your family business.

Travis Harms, who leads Mercer Capital’s Family Business Advisory Services Group, spoke to CNBC recently on the importance of valuation and understanding the value of your business. This week’s Family Business Director post highlights the piece, and we hope you check it out.

The Importance of a Quality of Earnings Study

Acquirers of companies can learn a valuable lesson from the same approach that pro sports teams take in evaluating players. Prior to draft night, teams have events called combines where they put prospective players through tests to more accurately assess their potential. In this scenario, the team is akin to the acquirer or investor and the player is the seller. While a player may have strong statistics in college, this may not translate to their future performance at the next level. So it’s important for the team to dig deeper and analyze thoroughly to reduce the potential for a draft bust and increase the potential for drafting a future all-star.

A similar process should take place when acquirers examine acquisition targets. Historical financial statements may provide little insight into the future growth and earnings potential for the underlying company. One way that acquirers can better assess potential targets is through a process similar to a sports combine called a Quality of Earnings Study (QoE).

A Look Into The Family Business Director’s Summer Reading Catalogue

We at Family Business Director hope you all had a relaxing and enjoyable Memorial Day Weekend. This week’s post is a collection of thought-provoking “summer reading” material. We hope you enjoy these pieces on a beach or by a pool, preferably while sipping a tall cool beverage. Happy reading!

Performance Measurement

Peloton, Planet Fitness, and Family Business

Pedaling Too Close to the Sun

Think back to March 2020.  Many businesses and operations saw immediate stoppages and closures with no idea when they could restart. The fitness industry was no exception. Planet Fitness, the gym operator, completely shut down its locations and its stock plummeted. Peloton Interactive saw sales surge for its at-home exercise spin-bike and its stock soar. These two businesses entered very different seasons at the onset of the COVID-19 lockdowns and slowdown. Planet Fitness was facing a sudden and bitterly cold winter, while Peloton was spinning its way into summer.

We think there are three lessons that can prevent your family business from pedaling in place: understand what season your business is in, be prepared for slow-downs, and diversify prudently. Read more in this week’s post.

Performance Measurement

Review of Key Economic Indicators for Family Businesses in Q1 2022

In this week’s post, we take a look at a few key macroeconomic trends that developed in the, shall we say, busy, first quarter of 2022. Between volatile equity markets, mounting global geopolitical tensions, raging inflation, and increasing interest rates, a lot went on in the year’s first quarter from a macro perspective.

We hope that this blog post cuts through some of the “noise” and provides our readers with a concise and unbiased look at economic trends from the first quarter of 2022. 

Would Elon Musk Want to Buy Your Family Business?

Who said: “Twitter has extraordinary potential. I will unlock it”?

If you answered “Elon Musk,” you’d be right. His potential acquisition of Twitter has been all over the financial press of late.

In this week’s Family Business Director post, we ask “What can your family business learn from the Elon Musk/Twitter saga”? There are at least two lessons to be learned. Read more in this week’s post.

Practical Considerations for Operating in an Inflationary Environment

In recent months, inflation has overtaken labor market measures as the most headline-grabbing macroeconomic indicator in the financial press. Inflation typically moves the needle more than other economic measures because of its effects not only on businesses of all sizes but also on consumers. The current inflationary environment has contributed to shifts in consumer behavior thus far in 2022, and it is important that family businesses build responses to changing consumer behavior into their budgeting and forecasting processes. In this week’s post, we take a look at key considerations family businesses should be thinking about in their response to the current inflationary environment.

The Perils and Pleasures of Forecasting in Family Businesses

The list of forecasting cliches is long (thanks, Yogi Berra!), but we were recently reminded of a good one: there are only two kinds of forecasts – lucky and wrong.  That reminder came from an article by Joachim Klement 10 Rules for Forecasting.

Klement’s list is focused on macro level economic forecasting, but several of his rules apply equally well to the micro level of individual family businesses.  In this post, we will consider four of Klement’s rules in the context of family businesses.

Family Business Director’s Reading Roundup

Here at Family Business Director, we are focused on the numbers of family business: measuring and assessing financial performance, establishing dividend policy, setting capital structure, making capital budgeting decisions, and structuring shareholder redemptions. All that said, we also recognize that family business leaders face many other critical challenges. So, in this week’s post, we provide a quick roundup of some of the best pieces we’ve come across recently dealing with management succession, governance, attitudes toward wealth, family relationships, board dynamics, and more.

Review of Key Economic Indicators for Family Businesses

Family business directors are often afforded a luxury that their publicly traded counterparts are not: the ability to focus on and plan for the long term rather than solely the next quarter’s earnings report. While family businesses may not have the in-house economists and research departments of the larger public, it is crucial for the management and boards of family businesses to keep tabs on the overall economic environment in which they operate, as an understanding of the metrics and trends driving or hampering growth in the economy can inform effective and relevant strategic, tactical, and operational planning and decision making aimed at maximizing long-term shareholder returns.  With that, we take a look at a few of the broad trends that bore themselves out in the U.S. economy through the end of 2021 and the first months of 2022. 

Planning & Strategy

2022 Credit Market Outlook for Family Businesses

Barring a change in the economic backdrop, the availability of debt financing for most family businesses in 2022 should be good; however, the cost of borrowing probably will rise in 2022. Market participants are highly certain the Fed will raise short-term policy rates to address high inflation that massive growth in monetary aggregates since March 2020 unleashed on financial markets initially and now the broader economy.

A 2021 Review of Family Business Director

We hope you had a great Christmas and a happy holiday season. To end the year, we summarize some themes and most read pieces from Family Business Director you may have missed throughout the year. Enjoy!

Charlie Munger, Elon Musk, Kenny Rogers and Your Family Business

Where does your family business find itself during the current planning cycle? Are there investing convictions that your family business should double down on like Elon Musk, or is it time to follow the Gambler’s advice and take some chips off the table? And what does Charlie Munger have to do with this? Check out this week’s post to find out.

5 Questions with Dennis Hinton

An Interview with the Managing Director of a Private Investment Firm Focused on Non-Controlling Equity Investments in Family Businesses

In this post, Travis Harms sat down with Dennis Hinton, Managing Director at North River Group, to speak about some common reasons family businesses seek non-family equity and how family business owners can achieve liquidity and diversification.

Dividend Policy

Family Business Dividend Survey Results

This summer, we partnered with Family Business Magazine to conduct our inaugural survey of dividend practices at family-owned businesses.  This week, we feature an article that we wrote for the magazine summarizing the survey results.  We hope you enjoy and gain some insights that can help you and your family evaluate your current policy and make plans for the future.

Can You Hear Me Now? Lessons from a $20 Billion Family Business Fight

The recent turmoil engulfing the Rogers family, controlling shareholders of the $20 billion Canadian wireless communications and media conglomerate Rogers Communication, piqued our interest. What can public family strife affecting the Rogers family teach us? Well, quite a bit. In this post, we summarize the family drama and provide three strategies to keep in mind to stave off harsh family infighting that can, ultimately, bleed over into your company’s ability to operate effectively.

Capital Structure

How Stable Is Your Family Business Stool?

My family and I have been out at the Broadmoor in Colorado Springs for a work conference. Since we were going to a nice resort and conference center, we decided to parlay the weekend into a family business meeting. The meaning of the family business impacts the three key legs of the family business stool: dividend policy, capital investment, and financing decisions. In this post, we detail how we thought about each of the three legs.

Planning & Strategy Taxes

Looming Estate Plan Disruptions

Are You Prepared?

Numerous changes lurk in the current reconciliation bill snaking its way through Congress and it could have major ramifications to the estate plans you worked up just a few years ago.

In this post we briefly touch on planning vehicles and structures as well as valuation tools currently being debated in the reconciliation bill and why they are important to many family business owners and advisors.

Should Your Family Consider a Family Office?

If you are in the fortunate position to be the owner of a profitable family business you might consider hiring an expert to help manage your wealth. If so, you should be familiar with two primary business models available to assist in wealth management: traditional wealth management firms and family offices.

In this post, we discuss some key differences in deciding which financial solution is best for an ultra-high net worth individual or family.


Tax Changes Remain Murky: A(nother) Tax Update

The U.S. House Ways and Means markup of the $3.5 trillion reconciliation bill is here and we’ve discovered surprises both big and small.

In this post, we summarize some of the key proposals that you and your family board need to keep an especially close eye on.

Consulting Services

Family Business Advisory Services

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