Family business stakeholders say next generation not yet ready to take over
Tuesday 3rd February 2015
Two-thirds of senior stakeholders in family businesses think the next generation is not yet ready to take over, according to new research commissioned by law firm Gordons.
More than 70 senior stakeholders in the county’s family businesses took part in detailed telephone interviews for the research. The findings are itemised in the Gordons report Future Proofing Family Businesses: Generating and Preserving Wealth, which can be viewed on our website.
Most respondents (56 per cent) envisage the next handover will not happen for at least 10 years and almost half (44 per cent) believe changes will be needed before they relinquish control, as they feel their businesses’ current ownership structures would not serve the next generation well.
Over a third (37 per cent) of respondents said they had family members who did not want to get involved in their enterprises.
Perhaps partly because of this, the research confirmed that most family firms are not closed shops. Over seven in ten respondents (72 per cent) agreed their families were open to bringing people into the businesses who were more skilled at running them than themselves. Of the 20 per cent whose families did not want to recruit outsiders, the main reasons cited were losing an element of control and fears about differing interests causing conflicts.
The survey also revealed that family tensions within businesses are by no means a thing of the past. Almost half (44 per cent) of the stakeholders who had taken over their companies from previous generations felt there had been difficulties or frustrations during the transitions. Fifty per cent of those who had experienced these issues said the reason was the unwillingness of their forebears to surrender control.
Gordons has significant specialist expertise in advising family businesses and individual members looking to preserve wealth they have generated. It acts for a large number of such enterprises, across a wide range of sectors, including motor group JCT600, civil engineers J N Bentley, global publisher Emerald Group, plus shoe manufacturers Pavers and temperature-controlled distribution specialists Reed Boardall.
The launch of the new research follows a successful event for family business managers at Gordons’ Leeds offices during November. This featured contributions from some of the most successful entrepreneurs in this type of company. Speakers included John Tordoff, chief executive, JCT600; John Ridings, non-executive director, engineering, IT and facilities services business NG Bailey; Jonathan Turner, chief executive of diverse operation the Bayford Group; and Mark Roberts, former chief executive, auto-part distributor Andrew Page.