Three types of family business ROI

Family business owners tend to emphasize the financial bottom line, but family members actually receive three types of return on their investment in the family business, according to Meghan Juday, the IDEAL Family Council chair and a member of the IDEAL Industries’ board of directors.

Juday, who is also a family business consultant and director of the Initiative for Family Business and Entrepreneurship at St. Joseph’s University in Philadelphia, describes the three types of family business ROI as follows:

• Financial return. Family members need a financial return as an acknowledgment from the company that their assets are invested in an enterprise with a long time horizon.

 Emotional return. Family members need to feel connected to the company -- its history, its products, its relationship to the community, its loyalty to employees or its philanthropic activities.

• Relationship return. Family members need to feel good about being business partners together. Getting together must be a fun, rewarding and fulfilling experience; every family interaction should not engender a feeling of dread or fear of conflict.

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