FAQs

1. I rely on my advisors (CPA, attorney, etc). Why do I need the Family Business Center at NexTier?

The work we do complements the work done by other professionals, and we partner with those individuals to resolve the uncomfortable issues that often face families in business and owners of privately held businesses. We take a broad, holistic approach to understanding the business. We also provide “soft” services to family and privately held companies like improving their communications abilities and creating comprehensive business strategies that traditional advisors don’t usually offer. Because we are a partner with NexTier, we also can offer banking, wealth management and insurance services, all in one enterprise. We also offer consulting about our services to other banks interested the concept of a family business center.

2. Are your services limited to families in business? What about other privately held businesses?

We are advisors to all privately held businesses, regardless of size. We are not limited to serving family-owned businesses.

3. What makes the Family Business Center unique?

Simply put, we get to know you and our depth of services goes deeper than other centers affiliated with higher education institutions. Because we are affiliated with a bank, our relationship with you includes a range of advice on financial matters and operations efficiencies that can only be found when dealing with a bank. In fact, we are the only family business center in the country affiliated with a bank.

4. Where are you located?

We are based in Cranberry Township, Pennsylvania, north of Pittsburgh, but can provide services to companies within a wide geographic area surrounding our base. Again, we also offer national consulting about our services to other banks interested in the concept of a family business center.

5. How long has the Family Business Center existed?

The FBC was founded in 2002.

6. How do families in business differ from families that are not in business?

Communication is more complicated among family members when ownership and management overlap with family dynamics. A much more complex web of relationships (suppliers, employees, advisors, trade group members, competitors, etc.) surrounds and influences the family. Families in business make more frequent decisions with greater consequences than other more typical families.

7. What qualities define successful families in business?

Shared values and power, traditions, willingness to learn and grow, activities for maintenance of relationships, genuine caring, mutual respect, assist and support one another, well-defined interpersonal boundaries, and trust.

8. What are some typical challenges unique to both family and privately owned businesses?

• Separation of authority from ownership and management
• Issues of unfairness in the successor generation
• Absence of a shared sense of purpose
• Communication problems
• Lack of formal structures and processes that manage decision making
• Neglect of individual, family and organizational development

9. What do you see as the most often-neglected component of family business planning?

Succession planning. Are you like the thousands of business owners who are so busy running their business that often they do not have time to plan next year, let alone designing a future succession plan. Succession planning is important because:

• In the eyes of a viable buyer, having a plan can actually increase the potential value of your business; not having a plan may decrease your business’ value.
• Retention of key personnel may be affected by lack of planning. Often the best employees choose to leave current employment because of concern or uncertainty about the organization’s future.
• Because the future is uncertain, having a plan in place helps illness, death or other unplanned circumstances have a less negative impact on the organization.

10. What are the most important issues to consider in managing succession?

We encourage our clients to think of the succession planning process as having five components that need to be transferred: stock ownership, management responsibilities, authority, relationships and knowledge in the atmosphere of shared and open communication.

11. What are some of the factors that complicate succession?

• Number of decision makers and stakeholders
• Lack of an objective facilitator
• Complexity of the asset base
• Congruence of thinking among the stakeholders
• “Fit” of the company in their market niche
• Trust level among stakeholders
• Competency level of key managers and owners
• Communication skills level among key participants