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…
Keeping the Family Business Healthy:
Four Keys to Success
by Karen Vinton
Family business plays a major role in our economy. It is estimated that over 90% of all businesses are family-owned or controlled. These businesses contribute almost 50% of our nation’s GNP. Yet what are the typical stereotypes that surround these businesses? We frequently think of “Mom and Pop” stores, the undeserving child who inherits the business, the family squabbles which end up in court, and family businesses as portrayed on TV and in movies (Bonanza, Dynasty, etc.).
Many of these stereotypes tend to be very negative and may lead us to make wrong decisions about our own family businesses. In fact, some consultants and business experts say the way to “save” a family business is to take the “family” out of the business! But is this practical advise?? NO!!! More…