Transitions in Family-Owned BusinessesAs we enter what is expected to be the peak decade of baby boomer retirement, the recent 2018 Insights into Family-Owned Business published by the Birmingham Business Journal focused on transitions happening, and expected to happen, in family-owned businesses.  The most significant expectation appears to be that many family-owned firms will be sold during this wave of baby boomer retirement.  This is not an unreasonable forecast based on the number of family-owned businesses in the U.S. and the troubling reality that many owners have not planned adequately for the succession or transition of their business.  Certainly, many family-owned businesses will be sold as part of a well-thought-out plan.  I expect more will be sold as a result of inadequate planning.

I had the opportunity to participate in the Table of Experts for the 2018 Insights issue. We focused much of our discussion on the importance of planning for transition in a family-owned business and challenges faced by families seeking to continue ownership through generations.  If you want the “CliffsNotes” version of the 2018 Insights, I would summarize the key points as follows:  Successful transition, whether that means succession to the next generation, moving to professional management under family ownership or a sale of the business for the maximum return, requires total commitment, continuous planning, unwavering focus and excellent communication.  Easy enough, right?  We also recommend outside help from knowledgeable, experienced, trusted advisors (which should come as no surprise).

I hope you find the 2018 Insights into Family-Owned Business helpful.   Please contact any of the attorneys on our team if you need additional guidance on preparing for the transition of your business.

Family Business Advocates: 2017 Highlights and Plans for 2018As we reflect on 2017, we thank our blog subscribers for making Family Business Advocates a great success. In case you missed them, below are some of our most popular blog posts from 2017:

We also hosted two well-attended and thought-provoking events with our clients and friends. In February, we hosted “Economic and Legislative Outlook for Family Business Owners,” and in November, we hosted “Transitions in the Family Business, Conversations with Family Business Owners and Leaders.”  Our “Transitions” event was followed by several blog posts highlighting insights from the family business owners and leaders who were panelists at the event.

Looking ahead, we expect that the recently enacted federal tax reform legislation will remain a dominant topic in 2018. The new tax law has already generated a substantial amount of commentary from accounting firms, law firms and other advisors. In the coming weeks, our Family Business Advocates blog will focus on key elements of the new tax law that impact family business owners. We plan to host an event for clients and friends in early March to discuss and exchange ideas about how the new tax law may impact, and create opportunities for, family business owners.

Please be on the lookout for our upcoming blog posts on the new tax law, and stay tuned for more information about our event planned for March.

Family Office Series, Part IV: Family Office TrendsIn the previous posts in our Family Office Series, we have examined, among other topics, how family offices are structured and the pros and cons of forming a family office.

For the final installment of our Family Office Series, we are highlighting current trends in the world of family offices. Here are several family office trends to watch:

  • Instead of investing through private equity funds, family offices are making direct investments in deals (either alone or in combination with private equity funds or other family offices) with increasing frequency.
  • Family offices are teaming up with other family offices to buy entire companies with the intent to hold and operate them for the long term.
  • Family offices are engaging in impact investing—investments that are intended to make a profit and also have a positive social or environmental impact. A recent Financial Times survey indicated that family offices allocate on average 17 percent of their assets to impact investing.
  • Family offices are forming formal and informal networks with other family offices to share information about deal flow, pool cash for “club-deal” investments, and discuss investment strategies.
  • Investment banks, private equity funds and professional service firms are increasingly catering to family offices and forming dedicated teams to serve family offices.
  • Family offices are attracting talented executives from private equity funds, hedge funds and investment banks.
  • Some family offices are funding medical research and raising awareness for diseases and conditions which afflict one or more family members.

Our Family Business Advocates team is following these trends, and we plan to report on other family office topics in future blog posts.