Irish family owned businesses have and will continue to be at the heart and life blood of driving economic activity and employment throughout Ireland, particularly in more regional and rural locations. Family businesses are also key to supporting the growth and development of foreign multinationals in both the manufacturing and services industries in Ireland.

Always on the agenda for family owned businesses is the balance between family and business needs, raising finance, managing change, innovation and technology, retaining existing and attracting new talent, climate change, regulation, good corporate governance, building for the future and succession planning. As a backdrop to this, family businesses must remember that if the business is nurtured and cared for, then the business will look after the family.

Future leadership and succession can be a worry for long established family owned businesses. The key is to have this on the agenda at an early stage and not to defer it. It takes time to formulate a succession strategy. A robust succession strategy and can take in the region of 3 to 5 years to complete. While tax is a key consideration in any succession strategy, it must be remembered that it is not all about tax. Tax planning comes later in the process and should not be the driver at the start of the succession planning journey. For some businesses, succession may involve the sale of part or all of a business for varying reasons. If disposal is the strategy that is ultimately decided on, commence the pre-sale strategy early as this takes time before you embark on the actual transaction journey of disposing of the business.

Managing talent is vital. Family members working in the business are awarded jobs, promotion and reward based on merit and performance in a similar manner to non-family employees and are subject to the same employee practices, policies and procedures. This will create a culture that embraces transparency, trust, loyalty and commitment among family and non-family employees. Culture is hugely important for family businesses to thrive.

Family business is not immune to the challenges posed by climate change and the ever-evolving changes brought about by technology, changing work practices and the regulatory environment. Therefore, family business must continue to be agile, open and adaptable to these changes.

Emotion and the business needs can often clash.  Family personal expectations and the commercial goals of the business may not align. Therefore, strong leadership, which does not equate to power, to give the business direction and empower employees is required. The sense of bond and culture within a family business is key to its success. A working culture that is nurturing and positive can give a competitive advantage and employees will feel that they really belong to something.

David Swinburne is a Chartered Accountant and Advisory Partner and Fitzgerald Legal & Advisory and works with growing family businesses and advising family businesses on exit and succession strategies.  

Leave a reply