Family Businesses Are Built To Last

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…

Mission Statements

by Leslie Dashew

In our last issue, I wrote about Vision Statements. There is often confusion between the concept of a vision statement and a mission statement. A mission statement is a statement of purpose: it describes why an organization exists. A vision statement, on the other hand, describes a desired state for the organization at some time in the future.

Mission statements help to clarify and focus the attention of those who belong to the organization. Business mission statements help employees understand why the business exists and can help them to understand how their role helps to contribute to the company’s purpose. For example, a company’s mission statement might read: The Company provides premier precision manufacturing solutions for our customers in the diesel engine and affiliated markets. Through our collective efforts, we will achieve strategic corporate growth and attractive capital appreciation for all stakeholders. We accomplish this by operating our businesses with a foundation of ethics, customer focus, developing and respecting our employees, and operational excellence. More…