Challenges of Sibling Ownership (1996)

Albert: Dad always wanted to grow the business when he was alive. Today, if he were still with us, he would be so proud of me, well, of all three of us. If we make this acquisition we could double the size of the business. It would really put our family on the map – even more than we already are. We’ve got to do it!

Peggy: Let’s go one step at a time. Sam, the two of us who work in the business have identified this potential acquisition. But Dad made you an owner too and we never forget that you’re equal with us. I want to make sure that you feel comfortable with this expansion, which has some big consequences.

Sam: Consequence number 1 being the debt. This acquisition would saddle the company with more debt than it’s ever had. Of course Dad levered up some – but this increases the leverage by a whole order of magnitude.

Albert: I don’t have a problem with that. Let’s go beyond what Dad did. Let’s prove we can be better than him at his own game!

Sam: It’s not about being better than Dad. We are the owners now and we have to be comfortable with the broad level of risk that the business is taking. Hey, I don’t want to sound awkward. But honestly, I think the three of us need to be clear about the risks that we, as joint owners, want to take with our joint capital.

Peggy: We’re in this together; we want to make sure we get it right for all of us.

Albert: It’s kind of frustrating. But I guess this isn’t a one-man business any more, like it was in Dad’s day. Now there’s a lot more ‘family’ in the family business.

Peggy: We’ll work it out between the three of us. And the Next Generation are going to be proud of what we’re going to achieve.