Though it often goes unsaid, family businesses form part of the country’s backbone. But how resilient are they, writes George Style, partner, Haines Watts?
We have evidence which shows that family businesses are generally more likely to survive in tougher economic times and are able to retain their staff better.
Partly this is because family businesses tend to fund for the long term and often reinvest profits back into the business. In many cases they are more cautious to rely on external debt and tend to hold higher cash balances. This means they’re in a financially more secure position when the going gets tough.
A long-term outlook helps family firms think beyond the day to day and consider what’s best for the business.
Getting succession right is one of the biggest challenges facing family businesses. There’s often a perception that the next generation doesn’t want to work in the family business – in our experience this isn’t the case. Many of the traits that we see in family businesses – having a strong culture, purpose and values – are increasingly important to millennials and generation Z.
To get it right, families need to plan ahead to make sure the next generation has the right skills and experience to take up the reigns. This might mean seeking experience outside of the business for a while to hone their expertise and bring new ideas. It may also mean using advisers to develop and execute the succession plan.
We’re having more and more conversations with entrepreneurs who are thinking, at an early stage, about how to build a family business and see it succeed across three generations.
Haines Watts supports many ambitious business owners with families throughout the local business community with first-rate business advisory and tax advice. Our wide range of services can help to strengthen your business and support you to accomplish your goals faster. Speak to our team of experts to help you work out how your business can achieve its goals faster in 2020.
See more at our website: hwca.com