Do You Have Owner Meetings? By Barb Dartt, DVM, MS Principal Consultant with the Family Business Consulting Group
Ownership…it’s a bit of a contradiction. On the one hand, we humans seem to get the concept as soon as a toddler can say, “Mine!” On the other hand, ownership as a distinct business role is often unnoticed in family businesses…particularly when managers and owners are the same people. In fact, owner decisions are few and far between. Here’s what owners actually decide: • Set the “playing field” for the business by defining the purpose, values, vision and some specific financial goals – levels of growth, risk, profit and liquidity; • Communicate that guidance, with one voice, to the board and managers;
Manager Thoughts
Owner Thoughts
• Review and support the strategy proposed by management, especially ensuring it can meet owners’ vision and goals;
Is the price right?
Does the additional acreage fit with our growth goals?
• Decide whether to keep, merge or sell the business; and
How will we finance it if there isn’t enough cash?
We just took on some risk by borrowing for a big expansion – should we increase our debt even more?
How will I find time to negotiate with the seller?
If we buy it out from under our neighbor who is renting it, will it impact our reputation?
• Elect directors, when they have a board. In the absence of a board, the owners also serve as directors. (And that job description is another topic for a different day.) These decisions certainly happen when owner and manager roles overlap – they just get a little obscured by the frequency and urgency of day-to-day management decisions. For example, an owner-manager who finds out that a contiguous 120-acre parcel is about to come up for sale probably thinks through both manager and owner considerations. 11
Summer 2022 — Partners
Can we plow under that line of saplings that got planted along the road three years ago?