The dynamic of a family business isn’t the same as that of an owner-managed business. Of course there are similarities, but the differences are profound. A conversation about the business will elicit their sense of being the custodian of the company, a fear that they might be the one who “drops the ball,” a desire to encompass staff, suppliers, and customers in that sense of family. Should the owner encourage their children to succeed them? It would be hard to find one who is voluntarily considering a complete exit.
Every family company is a lifestyle business in the truest sense. Because on one level it exists to deliver the requirements of the family, and on another, it is an intrinsic part of the lives of every member of the family, who will live and breathe it, or in some degree rely on it financially.
But is the new generation going to be committed to prioritising the business in their lives in the same way as baby boomer or generation x family business owner directors have done? Indeed, is the next generation willing to actually take the reins, and are their parents encouraging or discouraging them to join the business? Are we going to see a new era of family-owned rather than family-run businesses? And what prompts, and importantly, what will enable the family-owned business (across all generations) to look beyond the day-to-day and define or rekindle its ambitions?
In a report commissioned by Farrer & Co, long-established family businesses look to the future.
This is one of papers to be published in the report.
Click here to view the paper.
If you require further information about anything covered in this briefing, please contact Richard Lane, or your usual contact at the firm on +44 (0)20 3375 7000.
This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.
© Farrer & Co LLP, April 2020
This content was originally published by Decision Magazine.