So the Economy is Slowing Down!
by Dr. Jerry Osteryoung
By far lately, the most asked question of the Jim Moran Institute is how should an entrepreneur respond to a declining economy? There are two natural ways that usually come to mind: expanding sales or reducing costs.
While these alternatives seem obvious, we strongly recommend that before you do anything, you spend some time reflecting on your choices. Too often, we see cases where entrepreneurs respond without a lot of analysis with corresponding negative results. Spending some time mulling over the choices helps in making a decision and slows down the natural tendency to react to a situation.
The most obvious way that most entrepreneurs try to deal with a slowing economy is by increasing sales. Frequently, entrepreneurs want to increase their advertising or reduce their prices. However, this just does not seem to work for most entrepreneurs in a slowing economy as everyone else is trying to buy market share. It is like going to your favorite fishing hole with the fish not biting and you decide to go where everyone else is fishing. With a finite number of fish, putting more fishermen in one local area is just going to reduce the catch per person. More…
Show Me More Than The Money
Family Business Leaders Who View Private Equity Firms Only As Funding Sources
May Miss Several Opportunities To Realize Their Firms’ Potential
by Joseph F. Trustey
Family businesses are faring better than many other sectors of the economy. But new data reveal that many companies are not quite as robust as their owners might think.
In raw financial terms, family-run enterprises are remarkably secure right now. At a time when corporate debt levels remain high, many family businesses carry almost no debt.According to the latest American Family Business Survey, average revenues have climbed 50% in the last five years, and almost two-thirds of business owners are very optimistic about their prospects. Many can and will self-fund some growth, and their owners therefore see little reason to bring in outside equity investors.
That’s where their perceptions may work against them.
When they look at private equity firms purely as sources of capital, for example, family business owners overlook golden opportunities to address limitations they may not fully recognize. They may also forfeit favorable ways of pushing their businesses to their full potential. Later in this article, we will look at five ways in which the right relationship with a private equity partner can make a lasting difference to a family firm’s vitality. More…