Economic uncertainties constantly hound us. We’re on the lookout for potential market drops, economic crashes, and disrupted cash flows. During uncertain times, it’s important that family businesses devise a plan that can withstand economic disruptions. To start, Kate Mabry recommends evaluating your capital structure decisions with three questions.
Start by asking, “What is your family business’s current capital structure?” All family businesses have a capital structure (even if they haven’t explicitly defined it). Given rising interest rates and decreasing profit margins, it may be time to reevaluate the optimal capital structure for your family business. Some companies are exploring asset-based loans. These offer potentially cheaper financing options for business with strong balance sheets.
Capital structure decisions are key to a family business’s longevity. Discover the two other questions a family business needs to consider when evaluating capital structure decisions in “Decisions, Decisions: 3 Questions to Start Thinking About Capital Structure.”
Read about the three questions to evaluate your capital structure decisions here.
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