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In the U.S. Opportunity is Knocking: Gifting Discounted Assets Under Tax Relief Act of 2010 |  |
The owners of family businesses are sitting on a potential opportunity to make significant gifts to family members before December 31, 2012. The opportunity exists because of the increase in the lifetime gift exemption to $5M and the valuation discounts available for closely-held businesses. This means that millions of dollars can be transferred to the next generation without incurring a tax liability. This window of opportunity is open until December 31, 2012 when the Tax Relief Act of 2010 (TRA 2010) is due to sunset. ( Read more from Kay Abramowitz and add comments.) |
Family Business in Latin America: A Study of Characterization and Trends (A Work in Progress Report)
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This project is a non-governmental initiative that seeks to consolidate a body of knowledge and raise public awareness of the importance of these types of businesses. The study -- first of its kind and scope in the continent -- seeks to determine current dynamics, characteristics and future approaches for succession, professionalization and internationalization strategies. Every step of the research is supported by a recognized faculty member from a prestigious academic institution in each surveyed country. ( Read more from Guillermo Salazar and add comments.) En espanol |
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Risk Management --
Human Capital |  |
As we all know from working with families of wealth, each is unique and highly distinct from one another - therefore, the businesses they create are unique and reflective of who they are, their values, and their family culture. In the search for seasoned professionals to fill key roles within these organizations, a poor investment in human capital can become a major expense both financially and emotionally. Consequently, the familiar approaches to executive search don't always deliver the sustained results that matter most - managing the risk of "getting the right people on the bus," that fit the job, the culture, and the behavioral characteristics required to meet the performance expectations of the family. ( Read more from M. J. Rankin and add comments.) |
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Greetings!
You could call this the "video issue" of our newsletter... We are pleased to feature four video interviews with prominent family business experts. Videos have a great way of capturing enthusiasm and passion far beyond that which can be achieved with the written word. This passionate focus comes through clearly from each of our distinguished contributors. Oh, and incidentally, we also have five terrific blogs from another five distinguished contributors! |
 | Thought Leader Blog: Dirk Jungé | |
For Everything There is a Season...
 For family enterprises there is natural tendency toward establishing new entities to serve a wide variety of purposes. We at Pitcairn, as a family enterprise, have done the very same thing for ourselves: we have created holding companies to scale the financial infrastructure for our businesses; we have funded trusts, LLCs and partnerships to facilitate wealth transfer and protect assets; and we have set up foundations and donor advised funds to coordinate our philanthropic endeavors. For all families, as the vision and goals for the enterprise evolve, advisors help add the next appropriate entity to the wealth structure. But it is rare that any of us take the time to sit down to think about which entities are no longer necessary; that we manage the inertia of complexity by considering where and when it might be beneficial to simplify. Let me tell you the story of a family that not only successfully created entities but also had the wisdom to prune. ( Read more from Dirk Junge and add comments.) |
| FBWiki TV: Bonnie and Michael Hartley | |
Fire Drills: Strategically Integrated Contingency Planning
  In this video interview, Bonnie Brown Hartley and Michael Hartley describe the value of developing strategically-driven contingency plans so that a family-in-business can successfully move through abrupt transitions such as: sudden death, catastrophic illness, and even unexpected opportunities to sell the business. The Hartley's note that "there are no downloads from heaven" -- so planning ahead can make a huge difference for those who are left behind. ( Click here to see the video.) |
| FBWiki TV: James Olan Hutcheson | |
The Six Reasons Why Family Businesses Fail
In this video interview, Jim Hutcheson describes the six reasons why family businesses fail:
- A poor business concept (as in the dot-com bubble)
- Inexperienced management (experience is not a matter of "gray hair", but of having served in multiple different capacities in a variety of settings)
- Poor planning (for budget; for strategic growth; for wealth preservation; for risk)
- Inadequate capital (to rollout new products; to make acquisitions)
- Inadequate financial controls ("intuitive" rather than structured accounting)
- "The family effect" (weak governance; enabling; entitlement).
Jim also describes how family business advisors can start to help family businesses who are struggling with "the family effect". (Click here to see the video.) |
| FBWiki TV: Leslie Dashew | |
The Three Requirements for Effective Communication in a Family Business
In this video interview, Leslie Dashew describes the "three S's" which are required for effective communication in a family business: structure, safety, and skills.
Structures which can increase the likelihood of effective communication in a family business include: management meetings, board of director meetings, and family meetings. A safe environment for effective communication can be created through the use of "ground rules" and by using an external facilitator. Skills for sharing one's point of view -- without being aggressive -- and for listening and resolving conflict are also required for effective communication. (Click here to see the video.) |
| FBWiki TV: James Murphy | |
Family Offices as a Source of Capital for Family Businesses
In this video interview, James Murphy describes the potential "disconnects" between family businesses and traditional capital providers such as banks and private equity. For example, traditional sources of capital have a short-term horizon while family businesses often have a long-term perspective.
In contrast, family offices can be ideally suited for investing in family businesses. Family offices often invest with a long-term perspective; they understand family business governance and family business dynamics; and they value family business sustainability and legacy. (Click here to see the video.) |
| Mike Trueblood | |
The 12 Steps of Family Business Anonymous
Having spent 12 years as Director of the Family Business Council (FBC), one of Mihaylo College's Centers for Excellence at Cal State Fullerton, I have gathered substantial insight into the specific issues family businesses face. With retirement on the horizon, I'm preparing to pass the proverbial baton to a new Director, and I set about reflecting upon my tenure as FBC Director and the countless family businesses I've helped with to address and resolve a myriad of situations.
I noticed a pattern in the issues family-business owners faced, so I've compiled my top 12 tips from my 12 years at FBC. These tips are a valuable refresher for those industry stalwarts who may need reminding of the basics or a great starting point for family business newcomers. (Read more from Mike Trueblood and add comments.) |
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