David Baggott, is a Founding Partner of CN Strategic Advisors LLP, a family-owned independent advisory boutique, providing specialist advice to business owners on key business decisions and milestones such as; Strategy, Succession, Business sales, Acquisitions and Raising finance. Here, he explains some of the situations that require a business owner to appreciate which 'hat they are actually wearing' when it comes to the decisions that are being considered.
A common question that I get asked as a family business owner is…How do you find working with your brother? The answer, is that it works really well and we are almost always on the same page when key business decisions need to be made. This is great for us, however this is not always the case in all family businesses.
The answer to this type of question can vary significantly, and how the family members deal with conflict or disagreements can have a long term impact on success or failure.
Which Hat To Wear And When – Family Or Business?
One of the key reasons for business success or failure is people. Ensuring the business has the right people in place within the most appropriate roles and responsibility is vital.
The best leaders surround themselves with the best people, and so should family businesses. It is important to ensure the best management structure is in place for the future success of the business.
However, in family businesses it is also important to strike the right balance between strengthening certain roles with non-family members to drive growth and value enhancement, and retaining the family values & culture.
The best performing family businesses will be able to maximise the positive impact of their culture and values - one of their key USPs as a family business, whilst also strengthening their key business roles with the best people (which may be a mix of family and non-family).
Understand The Ultimate Aims
To help in deciding whether to prioritise family or business in key decisions, it is important to ensure the ultimate family aims from a wealth and business value perspective are understood.
Ensuring the family are aligned in these goals will help to facilitate decisions being made with the best intentions of realising these goals (rather than in the best interests of resolving short term family disagreements or conflicts).
Family businesses typically support many generations of family members. Ensuring the business performs well will allow the family to have many more options available to them to deliver their goals.
This could range from:
Retaining within the family to support current and future generations, either via gifting or selling to the next generation, or alternatively
It could be from selling to a competitor to de-risk the wider family wealth away from share capital to invest in alternative means or to pursue different goals.
Find out More - If you are looking to facilitate a family discussion about business goals, family wealth objectives, legacy and ‘what next?’ for the current and future generation, don’t hesitate to get in touch with David at CN Strategic Advisors via their website www.cnsa.co.uk or by email to Enquirires@cnsa.co.uk
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