We are all starting our lives over, making plans and perhaps using the lessons of the pandemic to change our priorities and behaviors going forward. Companies are also regrouping, considering new strategies and directions, and a new approach to bringing employees together and creating a new culture. These changes are especially relevant for family businesses, where personal and business goals often intersect.


Family businesses are particularly intertwined with family dynamics, and many are working their strategies and operations in response to new patterns of demand, as well as new risks and opportunities. The economic and behavioral consequences of the pandemic had varying effects on each market. As such, every family business has experienced and is likely to continue to experience different challenges.


This beginning of 2022 is the right time for family leaders to consider how the business has performed over the past year and what lessons can be learned, particularly in the way the family communicated, how critical and often complex decisions were made to preserve the asset values ​​and manage risk. This article provides guidance on areas of focus when rethinking family and business issues post-pandemic.


Re-evaluating investment strategies


Entrepreneurs have recognized that the pandemic has changed the way they do business, that new opportunities and risks have emerged. For example, properties in cities dependent on public transport have seen significant migration of people, where not all have returned. The pandemic has accelerated the move of seniors to the suburbs.


Retail oversupply in many markets has become even more pronounced and the strength of demand for office space remains uncertain as people experiment with scenarios such as home office or hybrids. Hotels took the immediate impact of the 2020 lockdowns, and while leisure travel has returned, it is still impossible to predict the full restoration of business and group travel demand. At the same time, many entrepreneurs are selling industrial properties and apartments as investor demand increases.

These rapid and often dynamic market changes require company strategies. Many entrepreneurs are looking to new markets to find better opportunities, shifting their investment goals to new types of businesses, planning to repurpose or looking for stopgap situations, and selling portfolios. These strategic changes can only be successful if the company has the right platform, local relationships, access to data, analytical and reporting tools, and capital availability to optimally implement the changes. Companies are also looking at their existing portfolios, reviewing budgets, modeling potential cash flows and capital requirements, and potentially adjusting expected returns.


While many management companies have made substantial progress in improving operational efficiency during the pandemic, they are struggling with rising costs in materials and labor. Budgeting capital and operating expenses in an inflationary environment with supply chain disruptions and worker shortages will be challenging for both acquisitions and asset management.


Another major consideration is whether the family business has paid sufficient attention to the environmental, social and governance (ESG) requirements of an increasing number of sources of capital. Investors are just as concerned about reducing the portfolio's carbon footprint as they are knowing that the company has developed principles and policies that provide equal opportunity for a diverse group of employees, benefiting the wider community. ESG is changing the way all companies operate and communicate their efforts, creating accountability for supplier selection processes, employee advancement, security measures and, of course, carbon neutral projects.


Liquidity monitoring

At the beginning of the pandemic, the biggest concern of entrepreneurs was liquidity. Many entrepreneurs were forced to seek agreements with their creditors to fill the liquidity gap, and some families had to put additional capital into the business. Today, depending on the type of business, much of the liquidity crisis has been resolved. Debt markets are wide open, although creditors remain apprehensive about office, retail and hospitality and underwriting standards. However, some companies are still paying on modified terms and must refund bookings. All this points to increased vigilance over the cash budget, monitoring loan compliance and preparing for loan maturities.


There is particular concern in family real estate businesses, as cash shortages have often translated into a partial or full cut in distributions paid to family members and limited partner investors. Thus, company management should be updating its cash flow models, projecting revised short-term and long-term income streams based on revised rent and occupancy assumptions, advance collection of overdue rent, operating expenses, capital budgets and payments. of debts. In this way, entrepreneurs can effectively communicate and proactively set the expectations of family members, outside investors and creditors.


Vulnerability Addressing 

Conducting a business vulnerability assessment requires an understanding of the environmental threats to the market and the location of a business. The investments needed to more safely house the building's mechanical system must be added to the short-term capital budget and considered in cash projections.


The pandemic has also brought to light two areas of focus needed by business leaders: fraud prevention and cybersecurity. Family businesses often do not have the same internal fraud prevention and control processes as institutional actors. In addition, the internal control environment can be weakened when employees are working from home. Pandemic stress, furloughs and pay cuts have the potential to motivate employees to commit fraud.


All companies, regardless of size, are vulnerable to cyber attacks. While not new, there are an increasing number of successful attacks publicized on what would be considered to be more secure companies. As family businesses implement more technology alongside management and accounting software, they also have to invest in security platforms to control and protect the entire IT environment. Additional supervision, enhanced training, evasion and protocols are all components of an effective IT security plan.


family harmony 

The challenges families have faced in the last year underscore the importance of empathy and good communication. This is equally true in a family business. Frequent family meetings and enhanced reporting can be used by leaders to explain changing strategies and rationale for critical decisions that impact family members, including distributions. The more information that can be shared, the better, in order to preserve family harmony and avoid conflict during difficult times. It is possible that during the pandemic some family members expressed conflicting opinions on how the company should deal with suppliers, creditors and investors. Creating a forum to air dissenting opinions and formally resolving such disputes can strengthen family ties and prevent ongoing resentment. Behaviors during the pandemic may have reinforced the need to create or refine family governance, including delegations of authority and richer information reports.


The past few years have also highlighted the need for improved emergency preparedness protocols. Tragically, some families may not have been sufficiently prepared for a sudden succession of leadership, both within the family and among management company employees, and difficult decisions had to be made in the midst of the storm rather than during a period of calm waters. Family meetings have the opportunity to assess skill sets and honestly discuss future family business leaders.


The realization that the health of family members or even lives can be vulnerable to sudden events beyond their control is disturbing, and part of emergency preparedness is creating a plan for all family members that organizes the necessary information if a family member family dies or becomes disabled. It provides a roadmap to important information and documents that are essential for an easier transition during a difficult time. A typical plan includes locating contact information, passwords, ownership documents and investment account statements.


Action Steps: The Post-Pandemic Checklist

As you move forward from the pandemic and consider the future, have you taken the following actions for your business and your family?


Business checklist


  • Update your business strategy;
  • Assess the suitability of the business platform to support the company's new direction;
  • Assess budgets and cash needs;
  • Analyze the refinancing potential of loans with short-term maturities;
  • Identify potential operating expense savings;
  • Assess the adequacy of internal controls;
  • Analyze ways to reduce the carbon footprint of both the company and its portfolio;
  • Conduct a formal assessment of the portfolio's vulnerability to climate change;
  • Create a statement of ESG principles;


family checklist


  • Hold a family meeting to discuss the company's performance during the pandemic.
  • Reset family members' expectations of investment returns and cash flows;
  • Update family governance documentation, including succession plans;
  • Consider ways to improve family communication, including regular reporting;
  • Develop emergency preparedness plans;
  • Encourage all family members to prepare a table plan;
  • Update your property and business plans;


Get in touch with TATICCA – ALLINIAL GLOBAL, which works with integrated auditing services, internal audit, accounting, tax, corporate finance, financial advisory, risk advisory, technology, business consulting and training, for more information, visit or e-mail and learn more. Our company has certified methodologies for carrying out activities.