Posted on 07/08/2013, 09:44
Research into family businesses indicates some startling facts:
We are all aware that family owned small businesses provide a vital and important contribution to the UK economy but research into family businesses indicates some startling facts…
All small businesses face challenges but family businesses will often have other challenges such as succession, family conflict and disputes in addition to the same day to day issues as other business structures.
At the beginning of every day all of the people of involved in the family business must leave their other roles, Father, Mother, Son, Daughter, Brother and Sister at the door. The situation can become even more complex when extended family members are involved in running or being employed in the business.
Having established a business it is not unusual for the first generation to be worried, concerned or even reluctant to let go and hand over the reins to the next generation. Sometimes this is because of a weak or poorly defined structure or even lack of confidence in the skills of younger members in the business. The result is an undefined succession and exit plan or, in many cases, these plans don’t exist.
Unfortunately the first time that a parent or founding member mentions retirement or an exit is often when they have become tired of the pressures of running a business and want to set a date in the near future to just walk away.
Another issue is that the younger generation sometimes has different ideas regarding what direction the business should take. Of course understandably the first generation founder/s is protective of their business or may sadly just be resistant to change. These differences can cause massive problems and conflict
The need for a clear vision that drives business strategy and planning is even more important in a family business as is the need for a Constitution Agreement which sets out roles and responsibilities and other rules.
Pro-actions have significant experience of resolving these issues and helping family businesses to define an agreed vision, a plan to take the business forward including a robust succession plan and Constitution Agreement. Without these in place an established family business is at risk of becoming one of the many business failures.
Written by Alan Briggs – BIS Pro-actions Essex
In or last article, “Measuring What’s Important” we discussed key performance indicators or KPIs. There are lagging KPIs such as financial measures that tell you what just happened and leading KPIs that indicate what your financials are likely to look like.Read More
Following on from our previous blog in this series, “The Most Important Thing”, the next step is to translate your goals into action. For this, setting your targets and measuring your performance against them is vital to making them happen.Read More
What do you want to achieve in your business? Every owner manager had their reasons for why they started out on that journey – what are yours? And more importantly, are they still valid, are you on track, or are your hopes and desires being frustrated?Read More