19 June 2015
Fatherly advice for business owners
Successful father-son duos can inspire others to turn a passion into a business. Before dominating the world of real estate, Donald Trump worked at his father's development firm; Rupert Murdoch and his son James are giants in the media world and William Gates was an early investor in the computer innovations of his son, Bill.
Family businesses now make up around two thirds of all privately-owned firms in the UK, providing over nine million jobs and contributing billions of pounds to the economy. However, one of the biggest challenges they face is succession planning, deciding how and when to hand over the reins to the next generation.
As we celebrate Father’s Day, Buckinghamshire legal firm B P Collins LLP has some timely words of advice. Simon Deans, corporate partner, says: “When you run a family business it’s easy to be caught up in day-to-day activity with little thought as to what might happen when it’s time for you to leave.
“Talking to other family members in the business early on about your objectives is essential, you need to find out if you all share the same vision – after all, if you’re planning to retire, you don’t want to discover too late that your son or daughter has no intention of taking over.”
Simon’s top tips:
- Consider exit planning and succession at an early stage – selling the business v passing it on to the next generation
- Take advice on the structure of the business – family-owned shareholdings can be complicated
- If your employees are fellow family members – remember they have the same legal rights as other staff
- When preparing for an exit, ensure all issues such as commercial contracts, compliance, share buy-backs and refinancing activity have been correctly managed to avoid any last minute hitches at due diligence stage
For more advice, email firstname.lastname@example.org or call 01753 279022.