Family Business Director

April 22, 2025 Planning & Strategy Shareholder Engagement

Next Gen Up

The transition to the next generation has been one of the main impediments to family businesses trying to establish a multigenerational enterprise. For many family businesses, this transition can be rocky (and often unsuccessful) due to the next generation’s lack of exposure to the business and last-minute succession planning. As more members of the next generation express interest in the family business, proactive succession planning and next generation engagement will be more important than ever to keep them involved and prepare them for the transition to come.

April 15, 2025 Capital Budgeting Planning & Strategy

Capital Budgeting and the Meaning of Your Family Business

As family businesses look into capital projects, they often utilize quantitative corporate finance tools, including net present value analysis, internal rate of return, and other traditional analyses. While these tools are informative when evaluating the feasibility of various capital projects, they are not quite as helpful in determining “what” and “how” to decide for your family business.

Before deciding on a capital project, family business directors must determine if the project is a more suitable use of family capital than alternative projects.

Knowing what your family business means can give you a leg up in evaluating these questions effectively and making the most appropriate capital budgeting decisions for your family business.

April 7, 2025 Planning & Strategy Shareholder Engagement Special Topics

The Patience to Prevail, Revisited

This week kicks off a time of economic uncertainty, with global financial markets in turmoil stemming from proposed retaliatory tariffs by the United States on effectively the rest of the world. Simultaneously, golf’s first major of 2025, the Masters, is poised to begin at Augusta National. While the Masters presents a radically different set of challenges from those presented in the Open Championship, the underlying themes and skillsets required to prevail remain the same and are just as applicable to family businesses facing challenges in times of uncertainty. With that in mind, we turn to some key thoughts for family business owners and directors to consider during these tumultuous days.    

March 31, 2025 Dividend Policy

Dividend Policy & the Meaning of Your Family Business

The intersection of family and business generates a unique set of questions for family business directors.  We’ve culled through our years of experience working with family businesses of every shape and size to identify the questions that are most likely to trigger sleepless nights for directors. Excerpted from our book, The 12 Questions That Keep Family Business Directors Awake at Night, we address this week the question, “Does our dividend policy fit?” 

March 25, 2025 Special Topics

Basics of Financial Statement Analysis

A Guide for Private Company Directors and Shareholders

We are excited to offer our readers a physical version of our piece, “Basics of Financial Statements: A Guide for Private Company Directors and Shareholders.” The purpose of this piece is to help readers develop an understanding of the three principal financial statements. We hope this provides you with a helpful resource for your own personal use, as well as a resource to share with your fellow directors & shareholders.

March 18, 2025 Capital Budgeting Dividend Policy M&A Planning & Strategy Special Topics Valuation

Crown Castle’s Lessons for Family Businesses

Last week’s news that the publicly traded REIT Crown Castle (ticker: CCI) had agreed to divest its Fiber segment was a bit of a perfect storm of the issues we focus on here at Family Business Director: capital allocation and strategy, return on invested capital, valuation, and dividend policy. After years of underperformance and stagnating dividends, Crown announced a “strategic review” of its fiber business in December 2023, which culminated in Thursday’s announcement that CCI’s fiber segment would be sold to two buyers for an aggregate purchase price of $8.5 billion. In this week’s post, we review how Crown Castle’s divestiture of its Fiber segment highlights the need for an integrated framework for family business directors to evaluate and monitor the key strategic finance decisions that influence family shareholder returns for the years and decades to come.

March 12, 2025 Planning & Strategy Valuation

Why the Value of Your Family Business Matters

In last week’s edition of the Family Business Director, we reviewed six valuation principles for family business directors to keep in mind when developing valuation estimates. As family business directors, it is important to understand not just the “how” of maintaining an accurate estimate of the value of your family business but also the “why.” In this week’s post, we have compiled a list of reasons why it is essential for both family shareholders and family business directors to know what the family business is worth (even if the family has no intention of selling).

March 3, 2025 Valuation

Back to Valuation Basics

As a family business director, many decisions you’ll make in 2025 will require assessing the value of the company’s shares, a particular business segment, or a potential acquisition target. What should you and your fellow directors know about valuation? In our experience, getting back to the basics with these six principles can be worthwhile.

February 24, 2025 Planning & Strategy Special Topics

The Most Efficient Way to Increase the Value of Your Family Business

In last week’s post, we reviewed what EBITDA is and why not all EBITDA is created equal. In case you missed it, we ended that post with the following statement: “…improving EBITDA margins can have a multiplicative impact on your family business’s value by both providing more EBITDA and justifying a higher multiple.” So, is it really true that a higher EBITDA margin will also bring a higher multiple, or were we just getting carried away with our own thesis? For this week’s post, we pull some market data to test our assertion.

February 18, 2025 Special Topics

Is All EBITDA Created Equal?

In the world of family-owned and other private businesses, most everyone looks to EBITDA (earnings before interest, taxes, depreciation, and amortization) as an indicator of financial performance. Legendary investor Warren Buffett, however, holds a long-standing grudge against EBITDA. Here at Family Business Director, we believe there is a time and a place for EBITDA in financial analysis, but Mr. Buffett does have a point — some EBITDA is better than others. But why? We explore EBITDA and why it matters for family business directors in this week’s post.