Family Businesses Are Built To Last
by Richard L. Narva, Esq.
Some family businesses are built to last.Many are not.In my view there are two clear indicators of whether a family business is built to last:its balance sheet and its vision statement.My experience tells me that when the balance sheet of a family business is relatively unleveraged because the owners reinvest the bulk of their profits consistently each year, they are voting with their dollars to build a family business that will endure.I do not question the choice of business owning families who choose to maximize withdrawals of cash for personal consumption.I simply argue that their companies are built to serve the current generation of owner/managers–a legitimate choice, but one which is inconsistent with an enduring family controlled business enterprise. More…