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Family businesses have long been an important part of the UK economy, and it is undoubted they will provide the foundations for increased growth and innovation in the business marketplace for many years to come. If you talk directly to family business owners, they are frustrated by being labelled as OMB’s and SME’s, so surely now is the time to call them what they really are, owners of successful family businesses.
In our last survey, we identified the future plans of many of these successful individuals and also the issues they believe they will face in making their exit strategies a success. It is also invaluable for family businesses to ensure the correct planning is in place for any exit, as without time and clear communication, as a business owner you are hampering the likelihood of success.
Around 40% of family business owners intend to pass on their family business to their children or other family members. To ensure the legacy they have built, can not only continue, but is able to thrive, these businesses need to discuss these plans with the next generation many years before the transition is intended. In my experience families don’t have this conversation early enough which often leads to problems later down the line. The findings of our survey supported this.
There will always be a difference of opinions and ideas of how a business should be run between the generations, this variation ensures that businesses continue to innovate and adapt to an ever changing marketplace.
Almost 30% of owners who intend to pass to the children indicated that their biggest issue is worrying whether the children are ready to take control. Interestingly, the next generation are also more concerned about it ‘going wrong’ or being prepared for this next step. If a business breeds a culture where both generations have reservations about each other, surely this is not a formula for longevity. By having honest and open discussions within a family about the future intentions of all generations, many of the most common pitfalls can be avoided or planned for.
It is by understanding these trends through the 2016 Family Business Survey Report and also the new 2017 survey which launched on 12 October 2016, that we as advisers are best placed to help this important sector continue to grow, innovate and ultimately stand the test of time.
To take part in the new survey please visit www.armstrongwatson.co.uk and add a valuable contribution to the ground breaking results.
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