Family Business Director

Corporate Finance & Planning Insights for Multi-Generational Family Businesses

Valuation

Why Do Buy-Sell Agreements Rarely Work as Intended?

The most common valuation-related family business disputes we see in our practice relate to measuring value for buy-sell agreements. Far too often, buy-sell agreements include valuation provisions that appear designed to promote strife, incur needless expense, and increase the likelihood of intra-family litigation. The ubiquity of valuation provisions in buy-sell agreements that do not work is striking.
In this post, we explain the top five causes of valuation process failure, and determine that there is a better way in which a valuation process for a buy-sell agreement can lead to reasonable resolutions.

Capital Structure Special Topics

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 Special Topics 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.

Special Topics

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.

Valuation

How Are Business Valuations Prepared?

For family businesses that have never had an external valuation, there is likely to be some confusion as to what the process involves. In this post, we give a brief walk-through of the valuation process, from engagement through to issuance of the final report.

Valuation

When Does Valuation Matter to Family Businesses?

Why should family business leaders care about the value of their business? If the family is not contemplating a sale of the business, why does valuation matter?

Clearly, valuation matters a lot when it is time to sell. But valuation matters at other times as well. In this post, we describe four common valuation applications in family business.

Special Topics

How Long Will It Take to Sell My Family Business?

That Depends on the Type of Transaction …

In this week’s Family Business Director, Tim Lee, ASA, Managing Director of Corporate Valuation and John T. (Tripp) Crews, III, Senior Financial Analyst, discuss expectations around the timeline for your business transition or sale and summarize key points to keep in mind when driving towards an internal or external sale.

Planning & Strategy Special Topics

Don’t Read This Book

Don’t read this book if you run a family business that is flush with cash, growing like a weed, regularly enjoys drama free family dinners, has their succession plan for your grandchildren in order, and do not foresee any disruption to your business over the next few generations.
Assuming the above does not describe you perfectly, the Harvard Business Review | Family Business Handbook by Josh Baron and Rob Lachenauer is a comprehensive and useful tool for anyone involved with or working in their family business.

Performance Measurement Special Topics

Sanderson Farms Case Study

Cargill is one of the largest family businesses in the world. Earlier this year, we analyzed the Family Capital list of the world’s 750 largest family businesses; Cargill checked in at number 15 on that list, with annual revenue reported to be in excess of $110 billion. Cargill made headlines earlier last week for its acquisition (together with another family business, Continental Grain) of Sanderson Farms, a publicly traded poultry business (ticker: SAFM). It is not every day that family businesses acquire publicly traded companies, so the transaction is worth exploring a bit further.

Consulting Services

Family Business Advisory Services

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