Construction Success Story: Family Business Squabbles Speak to Future Opportunities

Target Audience: Family Businesses, Construction Industry Professionals, Contractors, Construction Business Owners, Construction Accountant Interest, Construction Management, Company Heirs, Accounting Consulting Firm News and Updates Interest

Initially, the owner of a homebuilding and rehab company in a historically lucrative suburban area was glad when his son and daughter decided to join the family business. Yet his happiness turned to dismay when his two offspring almost immediately set to bickering.

Having a more aggressive business style, the son wanted to diversify the company into office rehabs and maintenance on large industrial buildings. The daughter, meanwhile, was more cautious. She wanted to narrow the company’s specialty and turn it into more of a “boutique” construction business that focused solely on environmentally friendly single-family home projects.

The owner soon found himself caught in the middle. For help, he turned to his financial advisor, who could provide an objective, business-oriented perspective that would keep matters from becoming too personal.

The financial advisor first pointed out that expanding into new areas could indeed pay off in more jobs and greater market share. Then again, moving too quickly into new areas could strain the company’s cash flow and spread resources too thin.

At the same time, the advisor noted that specializing in green homebuilding could allow the owner to use his money and resources more efficiently while raising his company’s visibility in an increasingly popular market segment. Yet he should take care to avoid cutting his profitability by missing out on jobs and altering many of his company’s tried-and-true building processes.

To help settle the conflict, the advisor set up a meeting in which she could use the company’s financial statements and historical job data to project just how the business might fare in either venture. During the course of the meeting, she was able to mediate between the son and daughter, giving each of their positions equal respect without appearing to play favorites.

When all was said and done, the construction company owner decided on a middle-ground approach. He would keep his construction company in its current market but look for opportunities to let his son and daughter head up reasonably sized projects in their respective areas of interest. In doing so, he could get a better idea of where his company’s future might (or might not) lie while letting his children pursue their individual visions.

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