Corporate Finance & Planning Insights for Multi-Generational Family Businesses
If private equity and family business had a relationship status on social media, it would undoubtedly be “It’s Complicated.” Even if they would rather not be connected, in 2025, what happens to private equity affects family businesses. In this week’s post, we look at several stories about developments in private equity and discuss direct and indirect implications for family businesses.
When it comes to investor sentiment, 2025 has been a tale of two very different quarters. During the first quarter of 2025, GDP decreased at an annualized rate of 0.2%, consumer spending only marginally increased, and the ongoing risk of recession grew. As we officially transition from the first half of the year to the second, investors hope to continue what has been a historic recovery over the last three months.
As emerging investor optimism for the rest of 2025 washes away the Q1 uncertainty and pessimism, in this week’s post we focus on two key questions related to growth, risk, and the meaning of the family business: investment decisions and distribution policy.
Selling a business is a three-step process. In reality, each of the phases overlaps to some degree, making the process more of a continuum than a finite set of procedures. A turnkey, orderly process typically requires four to six months. Ultimately, the collective team goal as a family business is to win the race, whether it be at the pace of the hare or the tortoise. In this week’s post, we take a deeper dive into those three phases and what that may look like for you and your family business when the time comes.
As we approach the middle of the year, uncertainty in the U.S. economy remains elevated, making this a good time for family businesses to return to the fundamentals and review key macroeconomic indicators from the first quarter of 2025 and into the second quarter. This week’s post provides a brief look at these trends and their implications, as well as some key risks in the U.S. economy to stay aware of through the balance of 2025.
At their best, multi-generation family businesses foster superior outcomes for shareholders, employees, customers, suppliers, and the communities in which they operate. Those are powerful incentives for maintaining family control of businesses across generations and through decades. Yet this remains the exception rather than the rule. Why? Enterprising family businesses that don’t have shareholder alignment around key issues cannot expect to last.
In this week’s post, we identify three principal financial questions around which shareholder alignment is essential for enterprising families.
The uncertain macroeconomic environment is prompting corporate managers to consider how a recession would influence their businesses. So, now is a good time to highlight this theme and for family business directors to consider the same. How will your family business fare if a recession sets in, and how are expectations affecting the value of your family business today? When discussing value, we find it helpful to group expectations into three primary categories: cash flow, risk and return, and growth.
Last week, we released our newest booklet, “Corporate Finance in 30 Minutes: A Guide for Family Business Directors and Shareholders.” Whether you read the digital copy, requested a physical booklet, or haven’t gotten a chance to look at it yet, here is a short video where Travis Harms discusses those three fundamental corporate finance questions that help family business shareholders understand the basics of corporate finance and ultimately result in more engaged and valuable shareholders.
We are excited to offer our readers a physical version of our piece, “Corporate Finance in 30 Minutes: A Guide for Family Business Directors and Shareholders.” We have put this piece together to give family business directors and shareholders a vocabulary and conceptual framework for thinking about strategic corporate finance decisions. We hope this provides a helpful resource for you and your fellow directors & shareholders.
Family businesses are uniquely positioned to leverage the skills, goals, and offerings of their family owners. Some family owners may have different priorities, like creating a legacy, maximizing their return, or simply building a career. As a family business director, knowing these different goals and the types of owners that make up the family business shareholder group is key, and engages and enables the owners who may want to expand their role and contribution.
It is understandably frustrating for family business directors when the simple question — what is our family business worth? — elicits a complicated answer. While we would certainly prefer to give a simple answer, the reality that a business valuation attempts to describe is not simple. In this week’s post, we demonstrate why the answer to that question depends on why the question is being asked.
