Autumn 1992

  • Autumn 1992

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In this issue

  • Invest in Your Kids Through a Family Bank

    Parents who want to spur entrepreneurialism in future generations should consider setting up afamily bank to fund new ventures by family members. Such a bank can be particularly important insecond- and third-generation firms that have many family members and not enough room in top managementfor all of them. The bank can grant loans based on a more impersonal assessment of risk, avoiding muchof the emotionalism that often surrounds intra-family borrowing.

  • How the Walton Family Partnership Worked

    No question about it, a lot of my attitude toward money stems from growing up during a prettyhardscrabble time in our country's history: the Great Depression. And this heartland area we come fromout here — Missouri, Oklahoma, Kansas, Arkansas — was hard hit during that Dust Bowl era.

  • A Model Program for Family Run Dealerships

    The spectrum of family businesses includes countless small dealers, franchisees, anddistributors who depend for their livelihoods on contractual arrangements with a large manufacturer.Fast-food outlets, soda bottlers, automobile dealerships, furniture distributors — these are just a fewof the industries in which small, independent firms, many of them operated by families, benefit fromformal ties with big corporations.

  • Hiring a CEO Without Giving Away the Store

    When family businesses seek to recruit an outside, nonfamily CEO to run the company, theyusually have to offer a compensation package that promises to build the individual's net worth. In theeuphoria of a hiring decision, often the first thing the family gives away is equity in thebusiness.

    Our firm has consistently advised against offering ownership as a hiring incentive. Giving away equitynot only dilutes family control, it can create weighty problems later on if the manager is notretained.

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