There are 4.8 million family-owned businesses in the UK alone, employing 12.2 million people, and they can be found in all cultures and sectors of business, so not to be ignored. It is often their entrepreneurial spirit that sets them apart and encourages others to work for and with them, but every family business comes with their own set of unique advantages and challenges.
Their advantages are attractive yet can vary greatly. Family businesses are often seen as being very stable and reliable organisations. Their shared values filter from their own family ethos into a business way of working and they tend to have a much more dedicated approach to business; it is personal.
But like most things in life there is always the other side of the coin and indeed family-owned businesses also have their very own unique set of challenges. What keeps them awake at night, more so than a non-family business, are those concerns of succession, legacy, family relationships and transition.
Family-owned businesses can be seen to be too inward facing and at times resistant to change. Change can be hard at the best of times but within a family business change is seismic when addressing succession or transition and if not done carefully can destroy a business, overnight.
Passing the business on to the next generation is the biggest challenge in any family-owned business. The rift between family working in a business and those outside of it can widen and potentially damage the business.
It’s all about perspective and there are many different options for ownership and control for family businesses to consider. It’s very rare that people can speak their minds in an honest and frank way without worrying about the repercussions. Even the closest of families can struggle to communicate when there’s a difference of opinion about the family business.
Fundamental to the success of a family business is how it is professionalised and governed. There is a need for families to be able to discuss difficult topics. It is proven that having a family blueprint, constitution or charter can enable a family to be more forward looking and plan for the future. It is a way to ensure that difficult situations or issues are addressed, agreed and written down in a living document as a point of reference. It is a way to protect both the business, all their employees and the family.
It is important for family businesses to ensure that they are putting the right strategies in place to continue to grow the business with the right people in the right positions. When coming across these difficult challenges most family businesses will seek specific expertise.
There are four core disciplines related to working with family-owned businesses – finance, legal, management and behavioural. Whilst also running a family business of my own, I have trained as a specialist family business adviser, focusing on the behavioural issues facing a lot of family businesses.
From my experience, within a family business, there are many things said that mean something completely different. For example: “I plan to retire on my 70th birthday” really means “I’ll be coming in a bit later each day but I still want to know everything that is going on….just in case”. I take the approach of listening, to every family member, confidentially. By facilitating sensitive conversations and revealing the conflict I can seek to bring resolution and harmony.
It is healthy for family members to re-group, re-evaluate, and build a new vision that is underpinned by their original family values.
Family Business Specialist
Family Business Place