Family Business Director

May 20, 2019 Shareholder Engagement

Tailoring Financial Decisions to the Meaning of Your Family Business

In a previous post, we identified the four basic economic meanings that a family business can have. For some families, the business is an economic growth engine for future generations. For others, the family business is a store of value. Alternatively, the family business can be a source of wealth accumulation or a source of lifestyle for family members.

As noted, there are certain family and business characteristics that can help family members discern what meaning “fits” their circumstances best. The meaning of the family business, in turn, has implications for the dividend policy, reinvestment, and financing decisions for the family business. In this post, we examine how the meaning of the family business influences these corporate finance decisions.

May 13, 2019 Shareholder Engagement

Case Study: Second-Generation Shareholders Achieve Long-Term Sustainability

This case study summarizes a recent engagement in which we helped second-generation shareholders balance two objectives in setting up a dividend policy. They desired a dividend policy that would enable each shareholder to set aside a significant nest egg of liquidity independent of his or her ownership of the Company while also being reasonable for the company, given the development of outside management and the need for and opportunities for the Company to grow.

May 6, 2019 Taxes Valuation

Five Takeaways for Family Business Directors from Kress v. U.S.

A recent federal court decision in a tax dispute represented a significant victory for family business shareholders.  The case (Kress v. U.S.) revolved around the value of a multi-generation family business, Green Bay Packaging (“GBP”). While we generally think family business directors have more important things to think about than tax-related judicial decisions, the Kress decision is one with which family business directors should be familiar.  In this post, we identify five important takeaways for family business directors from Kress.

April 29, 2019 Capital Budgeting

Three Questions to Consider Before Undertaking a Capital Project

Capital budgeting tools are ideal for answering the question: Is the proposed capital project financially feasible?  Too often, however, we see these tools being used to answer what seems to be a related question, but one that the tools are simply not designed to answer: Should we undertake the proposed capital project?  The first question opens the door to the second, but the tools of capital budgeting – no matter how sophisticated or quantitatively precise – cannot answer the second.  To answer the second question, family business directors need to consider three qualitative questions identified in this post.

April 22, 2019 Performance Measurement

Basics of Financial Statement Analysis

Part 4: Telling the Company’s Story

This post is the fourth installment from our Basics of Financial Statement Analysis whitepaper.  In this series of posts, our goal is to help readers develop an understanding of the basic contours of the three principal financial statements. The balance sheet, income statement, and statement of cash flows are each indispensable components of the “story” that the financial statements tell about a company.

April 15, 2019 Special Topics

Family Business Industry Spotlight: Beverage Wholesalers

This week’s post is the first in a periodic series of “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 Tim Lee about the challenges and industry trends facing families in the beverage wholesaling industry.

April 8, 2019 Shareholder Engagement

Investor Relations for Family Businesses

An Informed and Engaged Shareholder Base is a Strategic Advantage

Family Business Director was in sunny Tampa last week at the spring edition of the Transitions Conference produced by Family Business Magazine. The sessions offered fresh insights on perennial challenges around succession planning, conflict management, and communication.  But the recurring – if not underlying – theme that impressed us was the challenge of shareholder engagement. 

April 1, 2019 Shareholder Engagement

What Does Your Family Business Mean to Your Family?

The meaning of a family business is a function of both family and business characteristics. In turn, it influences the dividend policy, investing, and financing decisions of the company. In this week’s post, we will identify the four potential meanings and correlate family & business characteristics with those meanings.

March 28, 2019 Special Topics

Mercer Capital Attending and Sponsoring the 2019 Transitions Spring Conference

The 2019 Transitions Spring Conference will be held next week, April 3-5, in Tampa Bay, Florida. Travis Harms, senior vice president and leader of Mercer Capital’s Family Business Advisory practice, will be attending the conference.

March 25, 2019 Performance Measurement

Basics of Financial Statement Analysis

Part 3: The Statement of Cash Flows

This post is the third of four installments from our Basics of Financial Statement Analysis whitepaper.  In this series of posts, our goal is to help readers develop an understanding of the basic contours of the three principal financial statements. The balance sheet, income statement, and statement of cash flows are each indispensable components of the “story” that the financial statements tell about a company.  This week, we focus on the statement of cash flows.