Keeping your business
...in the family
If the current media storm over the Duke and Duchess of Sussex deciding they don’t want any more media storms over them has taught us anything, it’s that not everyone wants to take on the family business. So many family-run businesses get started under the assumption that everything will be fairly simple and low-stress. Honestly, sometimes that’s true, as long as everyone involved is fully onboard. Literally millions of people are employed in family businesses around the UK – including at RIFT! It’s actually the world’s most popular business set-up. In the UK alone, they account for over 20% of the revenue collected by the taxman each year, and pump well over half a billion pounds into the country’s GDP.
However, it’s incredibly important to keep in mind that the rules and responsibilities don’t just disappear because you’ve put your partner on the payroll or accepted some investment cash from granddad. That familial goodwill you’re probably depending on is no substitute for proper business arrangements, solid contracts and expert bookkeeping. Obviously, you’ve got your home work lives to juggle here, and it’s tough to keep them completely separate when you share a dining table with your company’s MD. On top of that, if you’re growing up in a family that works together it’s easy to feel trapped by the weight of expectations being loaded onto your shoulders. Not everyone wants to follow in their parents’ footsteps, which can lead to tension in both your home and work lives.
It all boils down to what’s often called “succession planning”. Despite there being almost 5 million UK family businesses – practically 9 in 10 firms in the country, an awful lot of them don’t really have a strategy for this. It’s a pretty big problem, too. Leaving your succession planning too late can mean you don’t have time to get it done properly. That can seriously mess with your business and force you to make key decisions in a rush. Suppose the person you’ve picked out to take up the reins has other plans, for instance, or simply isn’t up to the job. Do you have a back-up plan? If so, how do they feel about your second choice?
It’s worth putting thought into the long-term future of your business well before you step back from it yourself. For one thing, circumstances can change unexpectedly. It needn’t even be as dramatic as a divorce or death in the family either – although those can certainly happen. If you’re considering passing on your business to relatives once you step away from it, you’ve actually got more considerations than other kinds of company. On the one hand, it’s important to do what’s best for the business itself, passing control to the people with the most interest and aptitude for it. On the other, you’ve got to weigh up the more personal consequences of your choice. In some cases, you might even find yourself with no good moves to make at all – at which point it could be worth looking into other candidates outside the family, or even selling the business outright.
Obviously, with so many circumstances, obstacles and egos to contend with, there’s never going to be a one-size-fits-all solution. The important thing is to have a plan for the future of your business, and to make sure that the people it affects are happy with it. If there’s arguing to be done, shout it out across the dinner table long before it really matters. Websites like the Family Business Place can be a great resource for general advice and inspiration, while RIFT is always here for practical help and high-powered money magic.
Take care of your family, take care of business and listen out for more Voices from the RIFT…