Family is Everything, Even in Business

Anstett CPA PA is a family-owned business, and we are proud to serve the residents of Naples, FL. My wife Christina was actually born in Naples and made it abundantly clear that this is where she wanted us to set down roots and raise our family. I am so grateful that our family name is also our business name and I feel that family-owned businesses are special. Here is what I have found from Harvard Business Review to back my thoughts:

1: They’re frugal in good times and bad.

After years of studying family businesses, we believe it’s possible to identify one just by walking into the lobby of its headquarters. Unlike many multinationals, most of these firms don’t have luxurious offices. Family firms have the sense that the company’s money is the family’s money, and as a result they simply do a better job of keeping their expenses under control. 

2: They keep the bar high for capital expenditures.

Family-controlled firms are especially cautious when it comes to capex. “We have a simple rule,” one owner-CEO at a family firm told us. “We do not spend more than we earn.” This sounds like simple good sense, but the reality is, you never hear those words uttered by corporate executives who are not owners. 

3: They carry little debt.

Family-controlled firms associate debt with fragility and risk. Debt means having less room to maneuver if a setback occurs—and it means being beholden to a non-family investor. 

4: They acquire fewer (and smaller) companies.

Of all the plays a manager can make, a sparkly transformational acquisition may be the hardest to resist. It carries high risks but can pay large rewards. Many family businesses we studied avoided these deals. They favored smaller acquisitions close to the core of their existing business or deals that involved simple geographic expansion. 

5: They retain talent better than their competitors do.

The leaders of family companies praise the benefits of longer employee tenures: higher trust, familiarity with coworkers’ behaviors and decision making, a stronger culture. Interestingly, family businesses generally don’t rely on financial incentives to increase retention. Instead, they focus on creating a culture of commitment and purpose, avoiding layoffs during downturns, promoting from within, and investing in people.