Family owned businesses are seen as a key fundamental by the coalition government to stabilise the UK Economy. The cost cutting regime that is in place for the public sector means that any significant job creation will have to be in the private sector.
The Autumn Statement included a number of announcements that will help these businesses in 2013 and into the future. However, even though the external conditions may change, these businesses continue to have the same internal issues and dilemmas. In fact, the internal matters are often more of an obstacle to the business than difficult external conditions.
Family businesses present their own set of issues ranging from the day to day operational aspects to the long term strategic decision making. Trying to remove emotion from any decision making can be very difficult and this can result in actions being delayed or not being taken so that potential upset or confrontation is avoided.
This however does not aid the development of a business. In order to alleviate family related issues, many such businesses seek the input and advice from non-family members, who maybe directors, employees or external advisers.
It can be difficult for non-family members working in a family business. They can often be caught between disagreeing family members leading to periods of awkward and uncomfortable working conditions. However, where individuals gain the confidence of the family they can prove to be invaluable sounding boards and confidants, enabling decisions to be made with the head and not the heart.
Many family businesses are experiencing a lack of succession with family members choosing a separate career path. Although this does give rise to succession issues, it can also create opportunities for owners to consider alternative avenues for the future of the business. A trade sale or management buy out can be excellent options that previously may not have been considered.
To ensure any sale is successful, the process requires careful management to ensure the best possible exit for the owners. This may require a considerable period of planning, covering several months or even years, depending upon the particular business and circumstances surrounding it.
If family owned businesses are going to have the impact on the economy which the Government wants, they must be willing to adapt to the circumstances facing them. If this means that the business has to pass into the hands of non family owners then this should be done with the necessary planning and advice. Business continuity is the key factor and not necessarily the family legacy.
If you are a family business and would like to contact the Pierce team for further advice click here