Are you worried about the success of your Family Business?
59% of South West Businesses are ‘family run’ but only 3% of those businesses make it through 4 generations.
As the first flickers of improvement are glimpsed in the economy, it’s a crucial time for family businesses to ensure the foundations are in place for long term, sustainable success.
Family Businesses account for:
66% of all SME’s in the UK
30% of Private Sector turnover
9.2 Million Employees
and a turnover of £1,133 Billion
With 58% of Businesses looking to grow, why do so many fail?
50% of business owners say that they are unsure of what to do with their business and 48% of owners are yet to identify their successor.
87% of these businesses blame the economy for their decline but only 15% of business owners are willing to recruit outsiders into the business.
For family businesses, there is also a whole host of added challenges around preserving the wealth and wellbeing of the family, as well as the business itself.
It can be an ongoing challenge to balance the interests of different family members, and the interests of the business as a whole, without overburdening anyone, dashing their expectations, or creating unintended tax consequences. There’s also the risk that something happens in the future to jeopardise the business, such as a family member leaving the business, getting divorced, or passing away.
Establishing the ground rules…
In minimising these risks, one of the first areas to consider is the structure of the company – who owns shares, what rights those shares give them and how shareholders should work together in the interests of the business.
A shareholders’ (or partnership) agreement is a common method of formally setting out the ground rules for how the business is run, covering things like how directors are appointed, how the board takes decisions, how profits are distributed and how shares can be transferred…
Stephens Scown solicitors work with a number of family owned businesses and can help produce a robust plan to preserve the wealth and wellbeing of the family and safeguard the family business for future generations.