Top Tips for Family Businesses

Local pros offer words of wisdom

Never mix friendship and money” has long been a common piece of advice. But what about family and money? For this, Biz asked a few local finance experts to share some of their best tips and advice.

Starting Out
If you’re thinking of starting a new business with family members, experts say it’s critical that everyone work together to outline each person’s roles and expectations so that all are on the same page and misunderstandings are avoided.

“After all, you’re still likely to be sharing a table with them at Thanksgiving!” said Patricia Besselman-Main, principal and financial planner at Besselman Wealth Planners

Going in with a solid business idea and plan that’s flexible enough to allow for change can also help family businesses avoid potential conflict.

“I’d suggest being problem oriented,” said Jarrett Cohen, co-founder, principal and chief investment officer of JECohen. “The most successful family businesses solve a problem and or address a need. I’d also suggest being flexible to change because the business will unquestionably evolve over time.”

Expansion
When it comes to expanding your business, the biggest takeaways were to remain growth-oriented and take your time. An essential part of that planning is to look at the current state of your business. Assess your current staffing situation and make sure your business’s infrastructure can handle growth or expansion.

“Define in detail what your growth metrics should be and how long it should take to reach those goals,” said Jared Freeman, president and CEO at OnPath FCU. “Determine if you can create this growth or expansion within your current revenue structure and/or how additional debt could affect your business culture.”

Finding the Money
As far as financing options go, there are a lot of options.

“Utilize those resources,” said Besselman-Main. “Our region has a vast array of organizations that are working to help small and family-owned businesses thrive, all you have to do is reach out to them!”

The Small Business Association (SBA) and local banks and credit unions can also be great resources.

“Local, community-based financial institutions have the ability to partner with local business in a more flexible way,” said Freeman.

But at the same time, beware of predatory companies.

“Private equity firms and investors can be vultures,” said Cohen. “In my experience family business owners tend to have less remorse when selling to a strategic versus a private equity outfit.”

 


 

Perspectives Banking Freeman Jared

Believe wholeheartedly in what your business will provide. Purpose is the foundation for which the business must exist. Seek out those who have been successful in similar endeavors and get their advice. Understand that a large majority of family businesses fail. Find out why.

Jared Freeman, president & CEO, OnPath FCU

 


 

Perspectives Banking Cohen Jarrett

Jarrett Cohen
Co-Founder, Principal, and Chief Investment Officer
JECohen

I’ve often heard, ‘If you’re not growing, you’re dying.’ Maintaining a growth-oriented mindset is harder to do than it may seem. When you do so, however, one tends to glean opportunities that others may overlook.

 


 

Perspectives Banking Besselman Patricia

Patricia Besselman-Main
Principal and Financial Planner
Besselman Wealth Planners

Before you make a big change, ask yourself if you will be overextended, or if you will have enough to cover your operating expenses until revenues increase. If not, make a plan that ensures you and your family are covered before taking the leap.