The Key to Long-Term Shareholder Value, Part I

The Key to Long-Term Shareholder Value, Part IBaylor

Legacies Newsletter
by Donald J. Jonovic, Ph.D.

Owners of closely held companies, by experience, inclination, necessity, and, often, personality, tend to focus on the short term. Most available waking hours are absorbed by immediate problems, sudden opportunities, annual profits and cash flows. Fortunately, a successful business can, in fact, be built this way. It happens every day.

Unfortunately, this focus on immediate challenges and rewards is definitely not the way to build the shareholder value of that successful business for the long-term.

Consider how this outlook affects transition. Few would doubt that a smooth ownership and management transition in a family firm can enhance the value of that firm to shareholders and potential buyers. Even so, in companies with a short-term focus, transition (when it’s thought about at all) is seen as an “event” in some distant future: “We’ll get to it when the problem arises.” This is wrong. Companies don’t suddenly decide to have a transition any more than a woman suddenly decides to give birth. Transition is a process. It is a way of going about things. More…

The Non-Family Members of a Family Business

The Non-family Members of a Family Business
Delaware Business Review

by Nancy F. Blumberg, CPA, CFP
Simon Master & Sidlow, P.A.

Key non-family personnel are just as important to successfully operate a family business as family members are to the business.Attracting and retaining these non-family members will help the family firm grow and prosper.

There are a number of creative ways to keep those key employees happy without jeopardizing the family’s control of the business.To determine the most rewarding benefit to the key employee, first the owners need to be aware of the non-family manager’s expectations and concerns.

It’s not unusual for a key non-family employee to expect sick leave, disability, retirement and medical benefits.This employee will expect to be comparably compensated to others on his level in the industry. More…