Welcome to the FBUK Lifestages Framework. This is where you can search for information, resources and help based on the particular Lifestage of your family business.
At each stage, you will find a short introduction to the stage, some of the key questions family businesses often ask at that point on their journey, as well as a range of related resources.
There are also details and links to specialist family business advisors and relevant service providers for you to contact if you need more help or support.
Resources will be refreshed and updated on an ongoing basis, so keep an eye out for new materials and content.
At this stage the number of people involved with your family business is starting to grow. While you’ve managed succession in the family and business before, the number of people involved this time round will change how you think about succession. But it also provides new opportunities to ensure you’re set-up for a successful transition.
Where you have multiple family members working in the business, you’ll need to think about who the next leader(s) will be, and what kind of experiences and capabilities they will need to bring to the role.
If there are no family members working in the business, when you think about succession this time, it’s important to start thinking about your role as responsible owners and custodians of the business for future generations.
KEY QUESTIONS AND CONSIDERATIONS
As the entrepreneur, whether you are setting up the business on your own or with a family member you have there will be plenty to do to set yourself up for success. If you are starting your business with family members, it’s important to clarify your roles and responsibilities early and make sure the ownership of the business is set up correctly.
Existing and future family shareholders; and external professional advisers.
If you assume you can skip some of the formalities around going in to business together just because you are family members, you are potentially storing up problems later down the line. If this is the first time you’ve worked together, open lines of honest communication early – you need to be able to be honest about clashes in style so you can address and overcome any issues that arise.
As a family you will need to agree why you’re in business together and what you’re hoping to achieve. Is this something you want to do for a few years, or are you hoping to scale and grow over many decades? Ensuring you’re aligned on your direction and purpose will mean you can all pull together in the same direction.
As you decide on your plans legal, tax and accountancy professionals will ensure your new business is well structured and work for your family and business. If you are struggling with family communication, a family business advisor will be able to help you learn to work better together.
You’ve successfully started your business, and now you are looking at how you can expand and build on what you’ve achieved so far.
Up until now you may have only had family members working in the business, but as it grows you will need to bring in more people who have the skills you need to scale up. This will change the dynamic within your business, and you will need to ensure they feel empowered and engaged.
You may also need to start looking for outside funding to ensure you can invest and grow for the long term.
KEY QUESTIONS AND CONSIDERATIONS
As you look to grow your business you will need to consider what your role will be, and what roles family members will play. As the business grows you will need to bring in people who can bring the skills you need, and possibly move to a more strategic role and away from the day to day. It’s also important to think about your longer-term plan, and start thinking about succession
Existing and future family shareholders; senior management.
As your business grows you need to make sure your structures and processes support your growth. Understand your own strengths and weaknesses, and put a team in place that have the skills you need. Don’t neglect the longer term, think about long term issues like succession.
You may want your business to grow to become a large firm, move into international markets, or you might want to keep things smaller. Whatever your ambition, talk to your family and ensure you are all working towards the same outcome.
As you scale up the business you will be able to get support from business advisers, legal and accountancy professionals. Other business owners will also be a great sounding board, and help you foresee challenges on the horizon.
You may not have intended to run a family business when you set up your company. Perhaps you thought you would grow the business and then sell it when the time was right. But now you would like to see it remain in your family for the long term, or perhaps your children have expressed an interest in carrying it on.
Good communication is key here. You need to ensure as a family you have an open conversation about the future of your business, and that you develop a way forward that works for you all.
If you had been intending to sell, and aren’t going to, there will also be financial implications to consider. Perhaps the sale was going to fund your retirement, and you will now need to consider that as you think about the viability of passing the business to the next generation.
KEY QUESTIONS AND CONSIDERATIONS
If you’re the founder or business owner, you have important conversations to have with the next generation about how they can be involved in the business, and whether they want to be. It’s likely you’ll be the one to start that conversation. If you’re the next generation, it’s time to think about your future role.
Existing and future family shareholders and external professional advisers.
People often make assumptions about who might or might not want to be involved in the business. Don’t risk making plans on assumptions like these, and instead have open conversations with the family about the future.
There is no right or wrong decision about whether the family continue to own the business you founded. A good outcome is one where everyone is united behind the decision that is made, and everyone has an opportunity to share their preferred outcome.
If your family has challenges communicating and coming to a consensus, a family business adviser is particularly well placed to help you. As you decide on your plans legal, tax and accountancy professionals will ensure your plans and process are well structured and work for your family and business.
With your family members working in this business, you may find that your relationships as a family are changing. You might be taking home disagreements about how you take the business forward. Or bringing family disputes into the workplace.
If you haven’t already got it written down, you need to clearly articulate what everyone’s roles and responsibilities are. Role confusion in family businesses can be a real risk – are you speaking to either other as colleagues, or family members at a particular point in time.
This isn’t just about what happens when you’re working either. It’s important to find ways to ensure you still have fun as a family. Running a business can be all consuming, but you need time to bond as a family away from the business.
KEY QUESTIONS AND CONSIDERATIONS
When you own and work in a business with your family, role confusion can be a risk. Understanding at any point what hat you are wearing is essential. Are you having a conversation with your parent or your manager? Clarity is key.
Existing and future family shareholders; senior management; non-executive directors; and external professional advisers.
It can be all too easy to bring family disagreements into the business, or take work issues back home with you. Try to put some rules in place about how you deal with issues, and make sure you all know who has a role in business discussions. Bringing family issues in to the business risks causing issues with any non-family working in the business too.
A good outcome will be one where you can maintain happy family relationships, and constructive business relationships, where everyone understands their role in both entities and you can communicate openly to overcome any issues.
If your family has challenges communicating a family business adviser is particularly well placed to help you. Other business families will also be a great sounding board, and help you handle some of the trickier conversations that might crop up along the way.
Succession isn’t a one-off event, it’s a process. It’s also easy to think of it about one or two people taking on new roles, but it can affect lots of people in the family and business. Thinking about it early, and putting a comprehensive plan in place will make sure you have the time to get it right.
It’s important to separate ownership and management of your business as you think through your succession plans. These transitions can happen at different times. You may, for example, retire from your business but still retain your ownership stake in the business.
While some conversations may not be easy or comfortable, it’s important to communicate openly with your family as you plan for succession. Working together as a family to ensure a successful transition is a key to success.
KEY QUESTIONS AND CONSIDERATIONS
As a member of the current or senior generation, you need to make sure the business and the family are prepared for the future. But you also need to think about what your future holds. If you’re in the next generation you perhaps want to kick start a conversation about succession, so it’s good to find out more about the process so you can start informed discussions.
Existing and future family shareholders; senior management; non-executive directors; and external professional advisers.
Putting off preparing for succession can cause problems if someone unexpectedly dies or is incapacitated, and there is no plan in place. Developing a plan in isolation, without family discussion and consultation, also risks storing up longer term problems, and could mean the future shareholders become disengaged.
Exactly what your succession plan looks like will depend on your family circumstances. But the principles of a successful succession process are one where various scenarios have been considered and prepared for, so there are few surprises, and that the family backs the plan and the future of the business.
If your family has challenges communicating and coming to a consensus, a family business adviser is particularly well placed to help you. As you decide on your plans legal, tax and accountancy professionals will ensure your plans and process are well structured and work for your family and business.
At this stage the number of people involved with your family business is starting to grow. While you’ve managed succession in the family and business before, the number of people involved this time round will change how you think about succession. But it also provides new opportunities to ensure you’re set-up for a successful transition.
Where you have multiple family members working in the business, you’ll need to think about who the next leader(s) will be, and what kind of experiences and capabilities they will need to bring to the role.
If there are no family members working in the business, when you think about succession this time, it’s important to start thinking about your role as responsible owners and custodians of the business for future generations.
It’s important to start thinking about how and when you will want to hand over the management well ahead of time.
This will give you time to assess the potential successors, make sure they have the training they need, and ensure a smooth transition. Your next generation may be not be ready to take over yet, and the next leader might be a non-family member.
It’s also important to establish what your role will be in the future. As an owner of the business, you won’t just be walking away. You also have valuable experience and knowledge which could benefit the business. But you don’t want the new management to feel they can’t run things the way they see fit. So, you will need to work out your own role, and agree that with those taking over the management.
KEY QUESTIONS AND CONSIDERATIONS
As the current leader you need to make sure the business and the future leaders are prepared for the future. This includes ensuring they have the skills and training they need before they take on their next role. If you’re in the next generation developing a peer group of other family business leaders will help you over the years to come.
Current and future leaders; senior management.
Putting off conversations about handing over the management, may mean that by the time you want to step back, the next generation aren’t fully prepared to take on their new role. Equally, by putting off the handover indefinitely, the next generation may become disillusioned and think about stepping away.
A smooth, planned transition which ensures everyone has the support and skills they need for their next step. As well as the family members, you also want to ensure the other people working in the business understand the plan and feel reassured there is a plan.
You may want some support in addressing any skills gaps the future leader has. It will also be helpful for both the current and future leaders to talk to peers who are going through, or have been through, the same situation and learn from their experiences.
As the family grows and more family members become involved with the business, it’s more likely that there will be family members who are owners but don’t work in the business.
It’s time to start working out what your family governance should look like. This is how your family will engage with the business, and any rules and policies you put in place.
You might decide to write a Family Constitution or Charter which sets out who your family’s values, can own shares in the business, family employment policies and how the company should be managed. Setting up a Family Council could provide your family with a forum to discuss and debate issues around the future of the business.
KEY QUESTIONS AND CONSIDERATIONS
As a family shareholder it’s important you have a place to discuss the purpose and direction of the business with other shareholders. You might not work in the business day-to-day, but you might take a leading role in establishing the family governance.
Existing and future family shareholders; and external professional advisers.
Try not to start the process of designing your family governance with a fixed idea of what the outcome should be. If your family is small, a more informal set up might be suitable for you. Make sure whatever you come up with can grow and adapt with you as the family and its needs change.
Exactly what your family governance looks like will depend on your family circumstances. But the principles of good family governance is supported by the family, and that everyone agrees to go along with the spirit of what is in place.
When establishing your family governance an independent family business adviser can be particularly well placed to help. They will be able to facilitate conversations, help manage inevitable emotions and potential conflicts, and ensure the family come to a consensus on what is needed, and then work with you to put structures in place.
When planning for succession in your business It’s important to separate ownership and management as you think through your options.
If you were the sole owner as the founder of the business, it’s time to decide who will own your business in the future. Will all your children become owners, or only those who work in the business? Do you want to set up a charitable trust to benefit from ownership of the business?
There are different ways to structure your shareholding, and which is best for you will depend on your family and your business. Taking advice on the future structure, and the legal and tax implications of those, is important to make sure things are set up correctly.
KEY QUESTIONS AND CONSIDERATIONS
If you have already put a plan in place for succession, you should already understand what your role in the ownership transfer is. As a member of the senior generation, you will need to consider what your new role is if you are no longer an owner. As a next generation owner, you need to ensure you understand what it means to be a good owner.
Existing and future family shareholders; and external professional advisers.
Handing over ownership of shares has significant financial and tax implications. Ensure you understand these before you start any process of handing over shares. Owning a business also comes with responsibilities, and you need to make sure the next generation understand these before they take over ownership.
Exactly what your succession plan looks like will depend on your family circumstances. But the principles of a successful succession process are one where various scenarios have been considered and prepared for, so there are few surprises, and that the family backs the plan and the future of the business.
As you decide on your plans legal, tax and accountancy professionals will ensure your plans and process are well structured and work for your family and business. If the family are not aligned behind the proposed plan, a family business adviser will be able to assist on developing a consensus.
Taking over leadership of the family firm comes with not only more professional responsibilities, but can also impact your relationships with other family members.
You will be managing your business, but also managing the needs and expectations of family shareholders. This can be challenging, particularly if you are undertaking changes within the business.
If you haven’t already built a network of fellow family business leaders, it’s important to prioritise doing that now. You will be able to share your challenges, and hear how others have worked their way through those. While their route might not be the best one for you, it’s valuable to hear others stories.
KEY QUESTIONS AND CONSIDERATIONS
As the new leader of the family firm you will wear multiple hats – as the leader of the business, but also as a family member. You need to understand your responsibilities to both groups, and consider how you will manage these.
As the new leader it’s important to establish your intentions for the business, so that the management of the business are pulling in the same direction as you. Don’t assume people already understand your plans, be clear in articulating your vision and building a consensus behind it.
As the new leader it’s important to establish your intentions for the business, so that the management of the business are pulling in the same direction as you. Don’t assume people already understand your plans, be clear in articulating your vision and building a consensus behind it.
A change in leadership can be an exciting time, and provide the opportunity to look at things afresh and explore new opportunities. A good outcome is one where you embrace the opportunities this time provides, without overlooking important ongoing work which needs to be continued.
Building up a peer network of other family business leaders will be incredibly valuable. Not only will you be able to share insights about your business challenges, they will also be a great sounding board as you adapt to this role as a leader within the family too.
Encouraging the next generation to take an interest in the business, without feeling they are being pressured to join the firm, can be a difficult balancing act. But as the future owners of your business, it’s important they learn about the business and have the skills they need to be responsible business owners.
Familiarising the children with the business can begin early, by talking about the family legacy or offering work experience during school holidays. Encouraging the next generation to gain outside experience will also add value.
Not every journey will be the same. Some may know at 18 they would like to join the business one day; others might not decide that until in their 30s or 40s. Keeping the door open, and the conversation going.
KEY QUESTIONS AND CONSIDERATIONS
As a family member – whether a shareholder or not – you have an important role in preparing the next generation to be responsible owners. Whether this is through talking about your experience with the business, or supporting formal education and learning, there are lots of ways to support them.
Family members; family shareholders; non-executive directors; and external professional advisers.
Balancing a desire to get the next generation interested and involved, while not putting pressure on them, can be tricky. However, by talking openly with the next generation and demonstrating the many different roles they could play, you can help them find the right path for them.
An enthusiastic and engaged next generation, who understand the history of the business, respect the work that has gone before, and see opportunities for the future.
A family business adviser will be able to help you engage with your next generation, and even develop a programme for next generation education.
As the family grows and business grows you will need to review and refresh and any family governance structures you have in place. If you don’t have a Family Constitution or Family Council, you might consider setting those up at this point.
At the same time, consider your corporate governance. If you don’t have a board of directors, it’s time to start formalising your governance. This will provide structure for decision-making, and encourage discussion about the future direction of the business.
Your board should include a mix of family and non-family directors. Non-family non-executive directors can bring outside knowledge, experience and objectivity, as well as building relationships with the wider family shareholders without the historic family dynamics.
KEY QUESTIONS AND CONSIDERATIONS
As a family shareholder you may not have had a formal structure for your governance up until now, but as the family grows this could become useful. As a leader in the business a board with non-executive directors could help the business grow, and provide more strategic direction and input.
Existing and future family shareholders; non-executive directors; and senior management.
When establishing formal family and business governance make sure everyone is clear on the roles and responsibilities for each group, and how the two will communicate. The board have fiduciary duties, and any family member joining the board needs to understand these clearly.
Family and business governance structures can complement each other well, when each group understands its particular role and expertise.
When establishing your family governance a family business adviser is particularly well placed to help you. They will be able to facilitate conversations to ensure the family come to a consensus on what is needed, and then work with you to put structures in place.
At this stage the number of people involved with your family business is starting to grow. While you’ve managed succession in the family and business before, the number of people involved – and who it will impact – this time round is likely to be greater and more complex. This will change how you think about succession. But it also provides new opportunities to ensure you are set-up for a successful transition.
Where you have multiple family members working in the business, you’ll need to think about who the next leader(s) will be, and what kind of experiences and capabilities they will need to bring to the role.
If there are no family members working in the business, when you think about succession this time, it’s important to start thinking about your role as responsible owners and custodians of the business for future generations.
KEY QUESTIONS AND CONSIDERATIONS
As a member of the current or senior generation, you need to make sure the business and the family are prepared for the future. But you also need to think about what your future holds. If you’re in the next generation you perhaps want to kick start a conversation about succession, so it’s good to find out more about the process so you can start informed discussions.
Existing and future family shareholders; senior management; non-executive directors; and external professional advisers.
Putting off preparing for succession can cause problems if someone unexpectedly dies or is incapacitated, and there is no plan in place. Developing a plan in isolation, without family discussion and consultation, also risks storing up longer term problems, and could mean the future shareholders become disengaged.
Exactly what your succession plan looks like will depend on your family circumstances. But the principles of a successful succession process are one where various scenarios have been considered and prepared for, so there are few surprises, and that the family backs the plan and the future of the business.
If your family has challenges communicating and coming to a consensus, a family business adviser is particularly well placed to help you. As you decide on your plans legal, tax and accountancy professionals will ensure your plans and process are well structured and work for your family and business.
By now you likely have a significant number of non-family in senior management positions. For the first time you may be considering handing over the management to a non-family member.
It’s important to start thinking about how and when you will want to hand over the management well ahead of time. This will give you time to assess the potential successors or to start looking outside the business for the next leader.
As the departing leader you need to establish what your future role will be. You have valuable experience and knowledge which could benefit the business. But you don’t want the new management to feel they can’t run things the way they see fit. So, you will need to work out your own role, and agree that with those taking over the management.
KEY QUESTIONS AND CONSIDERATIONS
As the current leader you need to make sure the business and the next leaders are prepared for the future. This includes ensuring they have the skills and training they need before they take on their next role. At this stage you may decide that it is best for a non-family member to be the next leader.
Current and future leaders; senior management.
Putting off conversations about handing over the management, particularly if you feel a non-family member is likely to be the next successor, could mean you are potentially creating a problem for both the business and the family later on,
A smooth, planned transition which ensures everyone has the support and skills they need for their next step. If a non-family member is taking the reins you need to ensure that both the family and other people working in the business understand what will happen next and feel reassured there is a plan.
You may want some support in addressing any skills gaps the future leader has. It will also be helpful for both the current and future leaders to talk to peers who are going through, or have been through, the same situation and learn from their experiences.
Encouraging the next generation to take an interest in the business, without feeling they are being pressured to join the firm, can be a difficult balancing act. But as the future owners of your business, it’s important they learn about the business and have the skills they need to be responsible business owners.
Familiarising the children with the business can begin early, by talking about the family legacy or offering work experience during school holidays. Encouraging the next generation to gain outside experience will also add value.
Not every journey will be the same. Some may know at 18 they would like to join the business one day; others might not decide that until in their 30s or 40s. Keeping the door open, and the conversation going.
KEY QUESTIONS AND CONSIDERATIONS
As a family member – whether a shareholder or not – you have an important role in preparing the next generation to be responsible owners. Whether this is through talking about your experience with the business, or supporting formal education and learning, there are lots of ways to support them.
Family members; family shareholders; non-executive directors; and external professional advisers.
Balancing a desire to get the next generation interested and involved, while not putting pressure on them, can be tricky. However, by talking openly with the next generation and demonstrating the many different roles they could play, you can help them find the right path for them.
An enthusiastic and engaged next generation, who understand the history of the business, respect the work that has gone before, and see opportunities for the future.
A family business adviser will be able to help you engage with your next generation, and even develop a programme for next generation education.
As your business grows you will increasingly look to non-family to fill management roles. While family businesses are great places to work, it can be challenging to recruit and retain non-family talent.
You will need to consider how you will support and incentivise non-family members, who may be reluctant to take on roles where share ownership isn’t an option or where they feel there is a glass-ceiling for non-family members.
There can also be cultural challenges when non-family join the business. As a family you need to be united on what your expectations are, communicate those clearly to the managers, and give them the space to successfully deliver. The family will also need to work harder to positively engage with the wider group of employees too, as they move away from management roles.
KEY QUESTIONS AND CONSIDERATIONS
As a leader of the business, it’s important to be able to recruit and retain the best people to ensure your family business succeeds. As a family shareholder, you should be able to communicate a shared family purpose and ambition to non-family working in the business.
Family shareholders; senior management; and non-executive directors.
When it comes to recruiting non-family you need people who are not only experts in business, but who also understand your family and your business – and you all need to understand the roles you should play in decision making.
Family and non-family working together for the long-term success of the business, with clear understanding of role and responsibilities, and a pipeline of future talent.
If you need to look externally for talent working with a recruiter who understands family business and your culture is important.
At this stage the number of people involved with your family business has probably grown significantly. While you’ve managed succession in the family and business before, the number of people involved this time round will change how you think about succession. There will also likely be a wider age range within the next generation, which means they will be at different stages in their development.
Where you have multiple family members working in the business, you’ll need to think about who the next leader(s) will be, and what kind of experiences and capabilities they will need to bring to the role.
If there are no family members working in the business, when you think about succession this time, it’s important to start thinking about your role as responsible owners and custodians of the business for future generations.
KEY QUESTIONS AND CONSIDERATIONS
As a member of the current or senior generation, you need to make sure the business and the family are prepared for the future. But you also need to think about what your future holds. If you’re in the next generation you perhaps want to kick start a conversation about succession, so it’s good to find out more about the process so you can start informed discussions.
Existing and future family shareholders; senior management; non-executive directors; and external professional advisers.
Putting off preparing for succession can cause problems if someone unexpectedly dies or is incapacitated, and there is no plan in place. Developing a plan in isolation, without family discussion and consultation, also risks storing up longer term problems, and could mean the future shareholders become disengaged.
Exactly what your succession plan looks like will depend on your family circumstances. But the principles of a successful succession process are one where various scenarios have been considered and prepared for, so there are few surprises, and that the family backs the plan and the future of the business.
If your family has challenges communicating and coming to a consensus, a family business adviser is particularly well placed to help you. As you decide on your plans legal, tax and accountancy professionals will ensure your plans and process are well structured and work for your family and business.
As the family grows and business grows you will need to review and refresh and any family governance structures you have in place. Consider are the structures working for both your family and your business now, and are they going to continue to work as you transition to the next generation.
Your board should include a mix of family and non-family directors. Non-family non-executive directors can bring outside knowledge, experience and objectivity, as well as building relationships with the wider family shareholders without the historic family dynamics.
Finding the right non-family non-executives can be a challenge, and you will need to find people who understand the unique challenges that come with governing a family business, and value your family’s purpose and culture.
KEY QUESTIONS AND CONSIDERATIONS
As a family shareholder it’s time to consider whether the structures you have in place are working in the way you need, and whether changes are needed. As chair of the board, it’s time to review the governance structure and skills of the board.
Existing and future family shareholders; non-executive directors; and senior management.
When reviewing family and business governance make sure everyone is clear on the roles and responsibilities for each group, and there is an open discussion on where issues have arisen to date. The board have fiduciary duties, and any family member joining the board needs to understand these clearly.
Family and business governance structures can complement each other well, when each group understands its particular role and expertise.
When reviewing your family governance a family business adviser is particularly well placed to help you. They will be able to facilitate conversations to ensure the family come to a consensus on what is needed, and then work with you to put structures in place.
Diversifying your business can be an important step in making your business more resilient. However, in a family business it can open difficult conversations about your purpose, and how you will fund the investment
As a family you need to be clear on your objectives, and empower the leadership of your business to make recommendations or decisions that will help you meet those. Without that clarity up front, time and money might be spent exploring opportunities which aren’t appropriate for you.
You also need to consider how you will work to ensure your value and culture stay strong across a diversified portfolio of businesses, particularly where family members aren’t working in those every day.
KEY QUESTIONS AND CONSIDERATIONS
As a member of the family you have important discussions to have about the future direction of your business, and what your priorities are. These need to them be communicated to those running the business, so they can develop the strategies needed to deliver them.
Family shareholders; senior management; and non-executive directors.
If the family aren’t united around the future direction of the business, it risks sending conflicting messages to the management and fractured family relationships.
Setting out a clear vision and getting the right people in to run the business will help deliver a long-term diversification strategy for the long-term sustainability of the family businesses.
As you look at moving towards a more diversified set of businesses you will need to involve accountant and solicitors who can advise on the best structures, including how this will impact share ownership.
While you started with one family business, you may have naturally moved into other ventures and markets over time or now be actively looking at how to diversify for your family’s business interests.
As a family you have decisions to make about how you now transition to being a ‘business family’ or ‘family enterprise’. You may want to review your business and family governance structures, as well as the skills your next generation of owners will need.
You will need to also ensure the family is aligned behind your direction and purpose, so you can act quickly when opportunities for investment in new businesses and industries arise. The next generation may also have views on whether your traditional businesses still your values as a family moving forward.
KEY QUESTIONS AND CONSIDERATIONS
As the family’s business interests become more diverse, and the family grows, the family will likely start taking on different kinds of roles in the business. As family members you need to understand the roles needed in this new set up, as well as educating the next generation for their future responsibilities.
Existing and future family shareholders; senior management; non-executive directors; and external professional advisers.
When the family had one main business, there were set roles that needed to be filled. As you move to a family enterprise, it’s important not to try to just replicate what has gone before. Reassess the family governance, education and succession plans in light of the new structure.
A good outcome will be one where you can maintain happy family relationships, and constructive business relationships, where everyone understands their role in both entities and you can communicate openly to overcome any issues.
A family business adviser will be able to assist in ensuring your family governance structure and next generation engagement programme are fit for purpose.
As a family, you’ve been in business for generations together. And over that time your business and your family have likely grown, adding complexity into the family’s relationship with the business.
You will already have adapted and changed over time, keeping your business relevant to changing trends and challenges. Now’s the time to look ahead, and think about how you can embed that resilience so you can tackle the unknown challenges of the future.
With a determination to keep the family in the business for generations to come it’s important to put in place plans around how you intend to educate the next generation of owners so they are equipped to lead in the future, and inherit the passion and commitment you have for your business.
KEY QUESTIONS AND CONSIDERATIONS
As the family’s business interests become more diverse, and the family grows, the family will likely start taking on different kinds of roles in the business. As family members you need to understand the roles needed in this new set up, as well as educating the next generation for their future responsibilities.
Existing and future family shareholders; senior management; non-executive directors; and external professional advisers.
When the family had one main business, there were set roles that needed to be filled. As you move to a family enterprise, it’s important not to try to just replicate what has gone before. Reassess the family governance, education and succession plans in light of the new structure.
A good outcome will be one where you can maintain happy family relationships, and constructive business relationships, where everyone understands their role in both entities and you can communicate openly to overcome any issues.
A family business adviser will be able to assist in ensuring your family governance structure and next generation engagement programme are fit for purpose.
For many families the idea of listing this business is something they wouldn’t ever consider. However, it can if you’re looking to access a broader pool of capital for investment or release cash to family shareholders, it might be a path for you.
Taking the business public doesn’t mean yours will stop being a family business. The family will still be able to exert significant control over the future direction of the business.
You will need to take advice to consider which market is right for you, your future legal structure and classes of shares in that new structure. It’s also a good time to refresh how the family interacts with the business, and the governance in place around that.
KEY QUESTIONS AND CONSIDERATIONS
As a family you may now decide to list your business to bring in external capital for investment. If you are in a governance role you will need to consider how your responsibilities will change in a listed business. As family shareholders you will need to think about how you will maintain control over the direction of the business.
Family shareholders; senior management; non-executive directors; and external professional advisers.
When a business is listed there are new levels of reporting and compliance the business must consider. As more shareholders are introduced there also become more competing interests. It’s important that all family shareholders understand how things will change when the business is listed.
Bringing in external capital may help you to fund a transformation in the business. If some family shareholders wish to exit the business, this can also provide a good opportunity for them to leave and go and pursue other interests.
If your family has challenges communicating and coming to a consensus, a family business adviser is particularly well placed to help you. As you decide on your plans legal, tax and accountancy professionals will ensure your plans and process are well structured and work for your family and business.
If there is no next generation to pass your business on to, or you’ve decided it’s time for you to move away from the business, you’ll be looking at the options available to you.
Perhaps you are concerned whether new owners would put the same care and attention into the business that your family did, and whether they will continue to look after your employees.
This is a good time to consider whether moving your business to employee ownership is a good option for you, and whether that is a way to exit your business while ensuring the values live on. There are different ways to achieve employee ownership, and you’ll need specialist advice to navigate these.
KEY QUESTIONS AND CONSIDERATIONS
As a family shareholder you will need to discuss what kind of employee ownership you are looking to move towards and whether the family will exit completely. As part of the management team you will need to consider how the employees will be engaged in the process.
Existing and future family shareholders; senior management; employees; non-executive directors; and external professional advisers.
Don’t try to rush the process. Moving to employee ownership means there are even more stakeholders who will be involved in the future success of the business. You need to have a well-planned change management and communication strategy, to ensure everyone understands the changes that are coming and feels engaged in the process.
A good outcome is one where you successfully move to an employee ownership model with high levels of employee engagement and satisfaction, and a family that is pleased with the outcome of the process.
As well as engaging a family business adviser to help you agree on an outcome that works for your family, you should look at working with an employee ownership specialist who can take you through the ownership options and the process of transitioning.
As a family you might be thinking now is the time to sell or close your business. This won’t be an easy decision, but it could be the start of an exciting new chapter for your family. If all family members don’t agree with the decision to sell, it’s important to have open conversations about why this decision has been taken and make sure everyone understands the decision and the rationale behind it.
Selling one business doesn’t have to be the end of your family business journey though. You might be looking at using the funds to buy another business. Consider whether the new business be owned by all family shareholders?
You may also be keen to continue your family’s interests
KEY QUESTIONS AND CONSIDERATIONS
As a family shareholder you have a decision to make about whether you want to be part of the family business any longer. There may be an opportunity for you to exit, or it might be a decision by the whole family to sell.
Family shareholders; non-executive directors; and external professional advisers.
If the family are not behind the decision to sell, or don’t understand why it has been made, you risk damaging family relationships. Make sure there is open communication with the family.
A good outcome will be one where you can exit the business in a way that all the family are content with, and have a decision on what your future as a business family looks like.
If your family has challenges communicating and coming to a consensus, a family business adviser is particularly well placed to help you. As you decide on your plans legal, tax and accountancy professionals will ensure your plans around the exit work for your family and business.