FAMILY BUSINESSES - AN INTRODUCTION
Family
Businesses continue to make a significant
contribution to the development of economies
throughout the world. It is estimated that around
70% of the businesses in the UK are either; family
owned and managed; or family owned and led; or are
family owned.
Their traditions, shared values and commitment,
potentially give them a leading edge within their
market place.
However, those managing a family business, are
likely to have to deal with a number of complex
issues as the business develops and grow. These
connected to family, ownership and the business.
These include;
- Planning succession, both in terms of
ownership and management.
- Bringing children into the business.
- Developing a business plan that balances the
needs of the business and the family both in the
short and medium term.
- Managing the conflict between the
generations, marital partners and siblings.
- Continuing to communicate about the business
to family and non family employees and
shareholders.
- Making the most of the businesses potential.
- Developing an approach to Corporate
Governance that is appropriate to the needs of
the business and the family.
- Dealing with the distribution of assets
following death or divorce which ensures that;
the business continues, and that a balance
between equality and fairness is achieved.
WHAT ARE OWNERS/DIRECTORS CONCERNED
ABOUT?
From our experience, owners
and family members, working within the context of
the business, have similar concerns. Typically:
The family member who is Managing Director will
be concerned about some of the following. How do I
...
- Establish whether my daughter or son, are
able or willing, to take a significant
management role in the business.
- Ensure that the business continues to
survive as a family business
- Ensure that the company's payment scheme is
both fair and equitable for family and non
family employees.
- Appraise children and non family staff
working within the business.
- Develop a clear vision and medium term plan
for the business and the family.
- Hand over responsibility to my successor in
a way that they retain the confidence of the
employees, customers, suppliers and the Bank.
- Achieve personal long term financial
security, when I retire from the business.
- Ensure that, the distribution of shares, is
appropriate to future changes in the business,
the family and my personal circumstances.
- Ensure that we maximise on the advantage of
being a family business.
- Maintain a good working relationship with both,
family members who work in the business, and
with those who own shares.
The son/daughter who are working for or
thinking of joining the family business will be
concerned about some of the following. How do I
...
- Find out what my parents future plans
for the business are.
- Clarify the conditions under which I
will join the business. Terms and Conditions
of Employment ,roles and responsibilities,
and future opportunities.
- Know if I have the appropriate skills
and competencies to do the job.
- Judge whether I will get on with the
family in the business, and know whether I
will be able to persuade my parents to
listen to my suggestions.
- Face my parents if doesn’t work out.
- Gain the respect of the company s
employees respect.
- Demonstrate to my brothers and sisters
that I am up to the job.
Directors and Employees who are not
part of the Family will be concerned about
some of the following. How do I ...
- Avoid getting caught in the middle
when family members are in conflict with
one another.
- Ensure that I am appropriately
rewarded and recognised for the
contribution I make.
- Help the family make the business
more professional and separate family
from business issues.
- Ensure that I keep up to date and
maintain a career path of my own.
- Ensure that I am fully appraised of
all the financial circumstances of the
business.
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