An engaged and informed shareholder base is essential for the long-term health and success of any private company, and a periodic shareholder survey is a great tool for achieving that result. This week’s post includes a list of five good reasons for conducting a survey of your shareholders.
What’s the right capital structure for your family business? We find that the best answer to that question can be found after asking these four questions about the use of debt in your family business.
Share Redemption / Liquidity Programs
In last week’s post, we explored how family businesses can use periodic share redemptions or ongoing liquidity programs to promote shareholder engagement and satisfaction. This week’s to-do list includes important tasks for family business directors to complete whether planning for a one-time share redemption or establishing a family shareholder liquidity program.
There are many reasons family members may want to sell shares: desire for diversification, major life changes, funding for estate tax payments, starting a new business, or funding other major expenditures. What is the best way to provide liquidity to family shareholders on fair terms without sparking a run on the bank?
Family business directors must properly distinguish between capital structure and capital budgeting decisions to make the best decisions. In this week’s post, we answer a frequently asked question that leads us into a discussion of what is known as the “separation principle.” In short, what are the relevant cash flows for capital budgeting analysis? And, when is it appropriate to combine investing and financing decisions? If you have ever struggled with these questions, this week’s post has the answers you need.
Return on invested capital is not a silver bullet – it will not solve all of the challenges facing your family business. However, when we let the data speak for itself, the benefits of ROIC are undeniable. This week, we identify five reasons family businesses should focus on ROIC.
This month’s cover story in the Harvard Business Review takes aim at the misuse of metrics in businesses, highlighting the tendency of leaders to confuse numbers with strategy. In this post, we consider how to apply the authors’ suggestions in the context of family businesses.
This week’s post is a part of a periodic series called “Family Business Industry Spotlights.” In these posts, we will share conversations with our family business advisory professionals who have deep experience working with family businesses in a particular industry. We think the conversations promise to be of interest to family business directors regardless of their industry. This week, we talk with Scott A. Womack about the challenges and industry trends facing families in the Auto Dealer Industry.
Part 4 | Finance Basics: Distribution Policy
This post is the fourth and final installment from our Corporate Finance in 30 Minutes whitepaper. In this series of posts, we walk through the three key decisions of capital structure, capital budgeting, and dividend policy to assist family business directors and shareholders without a finance background to make relevant and meaningful contributions to the most consequential financial decisions all companies must make. This week, we focus on distribution policy.
Recent headlines around publicly-traded family business Nordstrom, Inc. illustrate the challenges family business directors face when making hard decisions about family management, stock ownership, and whether to sell the family business. In this post, we take a closer look at where Nordstrom finds itself, and the range of options available to the directors for moving forward.