Question: I am the second-generation survivor of a family-owned firm. I love the business my family is in, but I hate working so closely with them. It just seems like too much. We’re always together and while I love them all, it’s starting to have a negative effect on me and my own family. My husband is having a fit. Is there any way out?
Answer: Of course. Have you asked for a divorce? (Not from your husband, from your family!)
You shouldn’t feel too guilty. Actually, only about 30 percent of family-owned businesses even survive a second generation and most don’t make it to the third (roughly 10 percent).
But I must admit you are in a tough spot, especially since you enjoy the business. You might find it a little difficult to just pick up and go work for a competitor. So what to do?
Try setting limits at work and at home. If you have enough of your family at work, try not to spend a lot of time with them on the weekends. At the most, keep it to brief visits and focus the conversation on fun things the kids, cooking, movies, music, etc. Stay clear of anything that borders on business.
The problem with family-owned businesses is that the families themselves impose rules on the business, the same way they do at home. It didn’t work in the past and it probably never will.
Families in business together need to remember that it’s a business and should be treated as such. Hard to do, but important if everyone wants to get along.
Q: Starting a small financial service company is hard enough. But coping with a volatile stock and bond market makes things even more difficult. With a small staff, it’s very time-consuming to constantly track our portfolio’s level of risk as well as our regulatory capital. Is there any software available that could be helpful?
A: There is at least one software program that I’ve stumbled upon that might be worth checking out. It’s called RAMS and seems to be packaged (or at least its Web site is linked) with a company called Oasis Management.
It provides visualization through illustrative screens that are very intriguing. You can check it out at www.oasismanagement.com.
I’m sure if you search the Web by entering “risk management” or “portfolio management,” you’ll find other software programs that might be helpful.
Q: When my wife and I retired, we decided to buy and manage a bed and breakfast inn in Southern California. Our philosophy has been to give the best customer service that we can (instilled in both of us from many years of working for Fortune 500 companies). Recently, we stayed at an expensive hotel in New York, and the service was downright rude. I asked the manager what was going on, and he said it’s the newest trend called being “aloof.” Please don’t tell me this is the latest fad?
A: OK, it’s not true. At least for the rest of mainstream America. Who knows what is considered customer service at high-society hotels these days? It really doesn’t matter. Remember, they only represent a small percentage of the customer base.
Take heart in knowing that even if we survive millennium madness, and we cure the Y2K bug, I would wager it will still be in fashion to know your customers by name, greet them with a smile, provide courteous service, and provide products and services they actually want to receive.
Q: As a freelance reporter I consider myself a small-business entrepreneur. My reporting takes me to various places, sometimes with really rough terrain (I’ve recently had assignments in the Middle East and Africa). I need my computer to write and send my articles. I’ve gone through a variety of computers, and they don’t seem able to hack it. Do you have any suggestions?
A: I read a while ago about a laptop that was used at sea by the U.S. Navy as well as pit crews at the Indianapolis 500 to help tune up the race cars. The company that supplied the computers was called FieldWorks.
It seems able to satisfy various computing needs. Its laptops can handle shock and vibration and its keyboards are moisture-proof. (This might also be useful for women working at home with small children.) Plus, the company can custom-make your computer for your particular needs. It seems worthwhile to check out.
Q: As we prepared to put our offering circular together to market to potential venture capitalists, we got a bit stuck on one major issue: How do we accurately decide what our business is worth? Can you give us any quick tips?
A: The traditional method of evaluating a company’s value would be to analyze its financials. But most young businesses don’t have a financial history to evaluate. So you must create a scenario from which to base the valuation. Of course, you must decide for yourself, in this case, where to begin.
There is something called the Hidden Value Index, which was developed by CDB Research & Consulting Inc. in New York. The index examines eight characteristics that can help you assess your company’s worth. They are:
? Employee relations
? Ability to generate revenues
? Avoiding regulatory disruptions
? Reducing costs and expenses
? Customer loyalty and satisfaction
? Brand equity
? Intellectual capital and proprietary research and development
? Capacity to enhance productivity
It might be worthwhile to commission the Hidden Value Index for your company before you finish your offering circular. It could be the best investment you make for your own future.
Lorraine Spurge is a personal finance advisor, author of “Money Clips: 365 Tips That Will Pay One Day at a Time,” and business news commentator. She can be reached at (818) 705-3740 or by e-mail at [email protected].
