Corporate Finance & Planning Insights for Multi-Generational Family Businesses
Everyone agrees that communication promotes positive shareholder engagement, but what does it look like to communicate financial results effectively? In this series of posts, we offer practical suggestions for presenting key financial data in ways that family shareholders find useful. In the last post, we focused on the balance sheet; this week, we turn our attention to the income statement.
Regardless of how much debt a family business operates with, access to credit when it is needed is essential. In this week’s post, Andy Gibbs describes the key factors affecting banks’ willingness to loan money to family businesses, and provides an overview of what the credit outlook looks like for 2020.
Everyone agrees that communication promotes positive shareholder engagement, but what does it look like to communicate financial results effectively? In this series of posts, we offer practical suggestions for presenting key financial data in ways that family shareholders find useful. We start in this post with the balance sheet.
The new year provides a natural opportunity for family business directors to think about the current condition of their family business and ponder what the future might hold. In this first post of 2020, we identify a handful of questions that family business directors would do well to think about.
Listing the best books one has read over the preceding twelve months is commonplace. Family Business Director eschews the humble-bragging endemic to such lists. Instead, we offer a list of four books that we plan to read in 2020. We confess to reading far more book reviews than actual books, and we selected these books, in large measure, on the basis of generally glowing reviews. Upon completing each book, we will report back in future posts with our own impressions and takeaways for family business directors.
While its status as a Christmas song is perhaps debatable, Merle Haggard’s “If We Make It Through December” is classic country music at its finest. The song captures the pathos of economic distress, with the recently-downsized protagonist lamenting his inability to provide the Christmas he wants for his daughter. Although we suspect Mr. Haggard was not writing in this direction, the song has always made Family Business Director think about breakeven analysis. As the year draws to a close, family business directors naturally evaluate the firm’s profitability over the course of the year. For some, profitability was assured months ago. For others, it remains uncertain whether they will make it through December without incurring a loss for the year.
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 recent book, The 12 Questions That Keep Family Business Directors Awake at Night, we address this week the question, “Does our dividend policy fit?”
As recounted in the Harvard Business Review article entitled “What You Can Learn from Family Business,” an academic study of family-controlled and non-family public companies found that debt constituted 37% of the capital of family-run businesses, compared 47% for the non-family companies. This finding is generally consistent with our experience working with family businesses of all sizes. In this post, we consider why family-run businesses might be a bit more debt-shy than their non-family peers.
For most of us, Thanksgiving is a time to disregard normal dietary restraint in the company of extended family members that one rarely sees. For some enterprising families, however, Thanksgiving quickly devolves from a Rockwellian family gathering to a Costanza-style airing of grievances. So, in the holiday spirit, we offer this list of the top ten questions not to ask at Thanksgiving dinner. If you have trouble distinguishing between the board room and the dining room, this list is for you.
Family Business Director was recently whiling away the hours scrolling through the archives of the Harvard Business Review when an article caught our eye. “What You Can Learn from Family Business” was written by Nicolas Kachaner, George Stalk, Jr. and Alain Bloch, and appeared in the November 2012 issue. The authors describe an empirical study they undertook to discern the ways family businesses are different from their non-family owned peers. In a series of posts over the next several weeks, we’ll take a closer look at some of the attributes identified by the authors, particularly from the perspective of privately-held family businesses. This week, we’ll consider how family businesses make capital expenditure decisions.
