Family Businesses

Family businesses are a key element of commerce in the UK and, per a report from the Institute of Family Business, account for 30% of GDP and 40% of private sector jobs (9.5 million). Family businesses aren’t necessarily small businesses, with 10% of the FTSE 100 being family businesses. Howard Hackney, as former Head of Family Business at Grant Thornton and CBI/Real Business Best Business Adviser 2002, specialises in advising family businesses on how to deal with the generational issues that arise.

Statistics show that approximately only 10% of family businesses survive beyond the third generation. There are many reasons for this, but principally it is as a result of the natural tension that arises between “family” and “business” as the shareholding base gets wider as the generations progress. Every business and the people in it are unique. Whilst it may feel very different at the time, the issues themselves and their resolution are not unique. We have a clear methodology that can address the issues and have a matrix of solutions that, when provided in an integrated way, can ensure survival down the generations.

There are a number of different stakeholders in a family business which arise through the overlap of ownership, family and business:

Each has a different perspective, as does one generation to the next. We recognise how strong a family business can be, if managed appropriately, and there are significant benefits to using outside advisers to put in place a “system” that will manage the conflict and build on the strengths.

In undertaking any assignment associated with family businesses it is important to bring to bear a range of traditional disciplines from fund raising to tax, from estate planning to strategic planning and from legal advice to personal wealth planning and pensions. Without such integrated “holistic” advice there is a danger of the advice not being relevant to the “big picture”, which is the long term future of the business and harmonious family relations. This advice is given against the background of a number of guiding principles, the most important of which is to attempt to keep the shareholding base as narrow as possible. We often find that a Family Council representing each bloodline of a wide shareholding base can limit disputes as can the creation of an internal market for shares and the setting of a valuation criteria and a dividend policy.

Choosing the individual or individuals to provide management succession can be very difficult and we can assist in identifying the key attributes of a successor and how the earlier generation may be prepared to risk passing on control.

Choosing the right adviser is critical to the successful outcome of any assignment and in particular one that is seen as independent and not a representative of one faction or another – perhaps one of the most difficult things for an advisor to achieve. As a result we always advise careful consideration as to who should attend an initial meeting and thereafter how we communicate with those party to the process.


All of these issues are addressed in a series of three podcasts.


We have recorded a series of short videos for professional practices which can be viewed as follows:


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