Family Business Magazine E-Newsletter
December 19, 2005

Contents
1.  Forget business worries during your holiday feast.
2.  'Mandated buyout' a good option for stepfamilies.
3.  Government study: Small firms created 65% of jobs.
4.  Advice for affluent families: Set limits for your kids.
5.  Hot off the press: Family Business Magazine's Winter 2006 issue.

1.  Forget business worries during your holiday feast.  Successful family business owners live and breathe for their companies. So if a worrisome business issue is nagging at them, how can they avoid bringing this tension to the holiday dinner table? Psychologist and organizational dynamics specialist Tom Davidow, founder of Thomas D. Davidow & Associates in Brookline, Mass., offers these tips for separating the two realms:

• Lower your expectations. If business issues are brewing, don't expect -- or even try -- to solve them during the holiday.
• If a relative does bring up a business issue during a family gathering, try to respond by saying something like, "I hear you, and let's talk about this when we get back to the office."
• Remember that holidays create memories for your children. For their sake, encourage the adults to put their business differences aside until after the festivities are over.

2.  'Mandated buyout' a good option for stepfamilies.  Relationships in a blended family can fall apart when the person who held the family together dies, noted a recent article in the Wall Street Journal. Often, that person is a parent with children by two different spouses, according to the report. In business-owning stepfamilies, this can result in a contested will, which could force a liquidation of the business, the article cautioned. When the bulk of a parent's wealth is tied up in a family business, many planners suggest a "mandated buyout," in which the survivor who assumes control of the business must purchase other relatives' shares. This arrangement ensures that non-blood relatives aren't tied together by the business, the article explained. (Source: Wall Street Journal, Nov. 30, 2005.)

3. Government study: Small firms created 65% of jobs.  Newly released data from the U.S. Department of Labor's Bureau of Labor Statistics show that from September 1992 through March 2005, firms with fewer than 500 employees accounted, on average, for 65% of quarterly net employment growth, representing 13.5 million out of 20.6 million net jobs created by the total private sector. As of March 2005, firms with fewer than 500 employees accounted for 55.8% of private-sector employment, according to the business employment dynamics study, which measured the change in the number of jobs over time. The report, released earlier this month, also found that while firms in all size classes experienced at least one quarter of negative net employment change related to the 2001 recession, the larger size classes experienced more quarters of net loss than the smaller classes. (Source: U.S. Department of Labor Bureau of Labor Statistics.)

4.  Advice for affluent families: Set limits for your kids.  Often, children from wealthy families and affluent communities make assumptions about what they should have, based on what they experience in the home and with their peers, writes Judy G. Barber of San Francisco-based Family Money Consultants LLC in The Family Business Mentoring Handbook. "It's tough to say 'No' when you can't add, 'We can't afford it,'" Barber writes. "But there usually is a ceiling," especially if the family wants to reserve funds for business investments, charitable giving or long-term estate planning. Barber recommends the following response: "It may look like there is unlimited money, but that's not the reality. We have limits, too. Part of our job as parents is to support you in learning how to manage money. That means you have a certain amount of money that covers specific expenses." By contrast, she notes, comments like, "Money doesn't grow on trees" are often felt as criticisms. For other suggestions on teaching children about the value of productivity and good spending choices, see The Family Business Mentoring Handbook.

5.  Hot off the press: Family Business Magazine's Winter 2006 issue.  Subscribers to Family Business Magazine will soon get a look at the publication's new larger format and full-color design. Issues have been mailed and will be arriving shortly. Included in the new edition are articles on managing for value in family companies, how to resolve the gut-wrenching dilemmas that occur when business and family matters intersect, and one successful entrepreneur's decision to sell his family firm. Visit our website for subscription information.

Need a last-minute holiday gift? A gift subscription to Family Business Magazine will give your relative, client or colleague a year's worth of tips on building, managing and sustaining a family company, plus free access to our subscriber-only library of more than 700 family business articles. With our new Family Subscription rate, you will receive a special discount when you order up to 10 subscriptions for your family members, directors or clients.