FINANCE

QWhat is your top advice for family-owned businesses right now?

MITCHELL R. BORDELON, CFA, CFP CRESCENT STERLING PRIVATE WEALTH MANAGEMENT

Given the financial uncertainty of 2020 thus far, there is no guarantee the rest of the year will improve. For a lot of familyowned businesses, the majority of their wealth is in the business, which is a major risk, so our advice has been focused on reducing exposure to this risk. First, we have been recommending that these owners increase their cash reserves, if possible. Second, we have been recommending that family business owners use their outside investments as a way to diversify and attempt to reduce the risk exposure they face via their business. ARI GOLDFARB VP AND COO FOLLOW THE HUMMINGBIRD CONSULTING

COVID-19 has created unique oversight challenges in business. We no longer have the same access to accountability practices as usual. Most work is self-regulated, and the motivation stems from a sense of discipline. While this can create obstacles in traditional businesses, it is also where ownership thrives. A family business is a vehicle for a family’s success; if grown it can help future generations expand upon the path you created. That’s the buy-in and because the buy-in is shared by multiple participants, the sacrifices no longer seem as severe. With a family business, your baseline trust starts much higher than a nonfamily practice and offers the unique advantage of dispersed responsibility in an era where communication is not guaranteed. KATIE LEGARDEUR MANAGING DIRECTOR AND MARKET LEADER JPMORGAN CHASE IN LOUISIANA

For family-owned businesses, a path forward may fork in many directions, and include questions like ‘What adjustments and innovations are required to keep moving forward?’ ‘Should I consider an outside liquidity option?’ and even, ‘Should I sell my business?’ After a dramatic drop in the second quarter, middlemarket M&A activity is rebounding in the sectors that have benefited or substantially recovered from the pandemic and related shutdowns.

The current environment may create an opportunity for long-term wealth planning, while low interest rates, high estate- tax exemptions and potential lower valuations could support taking steps to transfer wealth in 2020. PHILIP P. MONTELEONE, CPA/CFF, CMA, CFM CHAIR OF MANAGEMENT COMMITTEE BOURGEOIS BENNETT, CPAS | CONSULTANTS

There are at least five benefits that should be used by most family-owned or small businesses in this ‘special’ year of 2020. We advise that these businesses look into programs administered by the SBA for PPP loan forgiveness and available EIDL loans, along with the Main Street Recovery Program, and tax credits available for employee retention and those under various medical leave acts. In addition, potential changes to the tax code might make this the year that is most advantageous for estate and business succession planning and the valuations needed to properly plan for the transfer of family wealth. TIFFANY NOTO CEO AND FINANCIAL ADVISOR PROGEN FINANCIAL CONSULTING

Many businesses have been fighting to stay afloat since COVID-19 began but it is not too late to get them back on their feet. I advise that in addition to cutting unnecessary expenses and accessing grants, businesses should build an emergency financial plan and succession plan and that owners should take care to protect their personal wealth as it is so very easy to deplete personal assets in such way due to the current business environment and trying to keep the business open. All businesses should have a savings account for rainy days and tax planning. If you are able, I advise giving back to the community. It will put a smiling face on so many people that may be struggling while building brand awareness. JOHN J. ZOLLINGER IV, NEW ORLEANS MARKET PRESIDENT HOME BANK

The dynamics of each family business are unique, but there are some constants, especially if there are multiple family members working in the business. It is important that each person have very specific, defined roles and that boundaries are set and communicated. In difficult times, re-examining your strategy is key. Doing things the way you have always done them might not be enough. People make the difference, so finding employees and partners that can help guide the business and provide expertise is essential to success. Relationships with key service providers are also essential in challenging times. Keep your advisors informed as your needs change and allow them to provide input and new solutions.