Directors’ Corner
Family Businesses Will Remain Nation’s Economic Backbone in 2016 By Jeffrey S. Davis and Brian Nagle
A
new year has arrived and family businesses seek a successful and prosperous 2016. The 2015 FBA Awards was a great success, and was our largest event yet. Nine awards were given to a fantastic and diverse group of family businesses. In today’s complex world, the merits and rewards of a family-owned business are as numerous as the challenges. Family members who manage and guide the family business should enjoy the business, and if they are to be successful and prosper, they must also eventually pass along the enterprise at an optimized time for both family and asset protection. Today the family owned enterprise is recognized as an important growing factor in the national economy. According to the U.S. Bureau of the Census, about 90 percent of American businesses are family-owned or controlled. Last year the world experienced terrorism, a collapse in oil prices and trouble with Russia and China, which increased global conflict and decreased economic growth. All this has led to na-
tional polls showing that a majority of Americans feel less confident. The upcoming election is dominated by social, economic and domestic issues. In many polls potential voters have expressed concerns with both parties, and say that we need to make vast improvements to ensure the way of life that so many families have worked hard to build. Under the current administration, the economy has improved as the unemployment rate has fallen to 5 percent, and job growth has been consistently strong. However, economic conditions in the U.S. remain “mixed.” The crash in oil prices and dramatic rise of the U.S. dollar is expected to continue to take a big toll on corporate America’s bottom line. Current research confirms that ongoing family control of a business offers additional potential efficiencies, as family decision-making can positively affect the structure and operations of their firms by applying long-term practical perspective to the business. This provides the business with a strategic advantage, few-
er human resources problems, creates greater enterprise value, and drives new entrepreneurial activity. However, success is never guaranteed. The complexity of family business and the skills required for successful operations continues to increase at a faster and faster pace than the individual can keep up without help. More than 30 percent of all familyowned businesses survive into the second generation. Twelve percent will still be viable into the third generation, with 3 percent of all family businesses operating at the fourth-generation level and beyond. Each family’s journey in business is its own unique reward. Family-owned businesses will continue to drive our economy and 2016 and we at the FBA continue to be dedicated on your continued success. We look forward to seeing you in 2016! ■ JEFFREY S. DAVIS IS CEO OF MAGE LLC AND A COFOUNDER OF THE FBA. BRIAN NAGLE IS MANAGING DIRECTOR AND PORTFOLIO MANAGER OF FIRST REPUBLIC INVESTMENT MANAGEMENT INC. AND A COFOUNDER OF THE FBA.
Massachusetts
FAMILYBUSINESS
Official magazine of the Family Business Association. Inc.
Editorial | Advertising | Design A Family-Owned Business Since 1872
101 Huntington Ave., Suite 500 Boston, MA 02199 fbaedu.com
DIRECTORS Jeffrey S. Davis, Mage, LLC Al DeNapoli, Tarlow, Breed, Hart & Rodgers, P.C. Brian Nagle, First Republic Private Wealth Management
4
PRESIDENT Edward D. Tarlow, Tarlow, Breed, Hart & Rodgers, P.C.
VICE PRESIDENT Catherine Watson, Tarlow, Breed, Hart & Rodgers, P.C.
TREASURER Jeffery P. Foley, Gray, Gray & Gray, LLP
280 Summer Street, Boston, MA 02210 Phone 617-428-5100 Fax 617-428-5119 www.thewarrengroup.com ©2016 The Warren Group Inc. All rights reserved. The Warren Group is a trademark of The Warren Group Inc. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher.