Planning, Advice & Conflict

Resolution for Family Businesses
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Relationships

No business is without its relationship and communication challenges.  The complexity and closeness of a family business tend to magnify these issues even more.  Some of the common challenges in family business:
Who will lead the company?
What are the core values?
Non-family Board members?
Non-family executives?
When will we seek liquidity?

 

FamStrat can facilitate the process of addressing these challenges head-on.  Long-term growth and liquidity can rarely be achieved without solving these challenges.

 

Common Problems / Roadblocks

Conflict between family branches
Inability of founder or senior generation to give up control
Disagreement about the strategic direction of the company
Differences in the wealth and cash flow needs of generations and family branches
Differences in the capabilities of different family members and the resulting perceived unfairness

Family Business Constitution
Sample Table of Contents

Take the Family Business Corporate Governance Survey  click here

 
News/Updates
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Planning

Strategic Planning. 

Some companies formalize the process of strategic planning, others just let it happen.  Either way, it should be grounded in and based on your family's values and objectives.

Tactical Planning.

Once an overalll strategy is in place, there must be a tactical plan with budgets and assigned responsibilities. There also must be a timeline with objectives and accountability.

Strategic Options. 

What are your options for future growth and liquidity?

 

Resource Based View

In strategic planning, companies often look at opportunities based primarily on external factors impacting current and anticipated future results.

 

In the family business setting, in addition to understanding external challenges and opportunities, it is critical to develop a strong understanding of the inherent advantages (and challenges) of the specific family business.

 

Viewed in this light, pursuit of particular opportunities will be better informed and will be better adjusted for risk.

 

Common Family Business Strategic Planning Issues

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Advice
Searching for liquidity can be a challenge.  You have spent your life -- your blood, sweat and tears building your family business, not looking at liquidity options.  You need help as you look at potential options such as leveraged recapitalization or acquisition.
Minority or control?
Strategic or financial?
Leveraged?
Acquirers and investors do deals all the time.  You may do one or two in your life.  You need assistance as you navigate these waters.

 

Strategic Growth and Liquidity Options

Once a family business has answered basic questions regarding organic versus acquisitive growth and even more basically, growth versus harvest, it is critical to understand the variety of options available for achieving the stated goals.

 

As a group, family businesses tend to be averse to financial leverage (debt), yet most understand that in order to achieve growth and/or liquidity options, leverage may be necessary.  If capital is required, the alternative to leverage, which broadly speaking is minority or control equity investment, presents its own set of challenges and trade-offs.

 
Family Office
Families often feel a great sense of relief once they have achieved a liquidity event.  Liquidity brings them:

Freedom

Flexibility

Confusion

Confusion? Yes.  It may sound surprising, but moving away from the day to day tasks of running your business can lead to other, less familiar challenges.

Where will you focus your investing activities?

How involved will your family members now be in the management of the family assets?

If you choose to undertake charitable activities, where will you invest?  Who will run those activities?

 

Use FamStrat Advisors' network of consultants and associates to answer these and other pertinent questions.

 

Typical Services Provided by a Family Office

Coordinate Use of Professionals

Investment Strategy Advice

Asset Allocation Advice

Estate Planning Services

Manage Philanthropic Activities

Basic Administrative Services

Financial Controls

 

The range of service provide by the Family Office is quite wide.  The main limitation is how much the family wants to keep in-house versus outsource to external professionals.

 

 
Telephone: From the U.S.: 1-888-399-0853; International: 001-773-913-8466
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