Succession planning: UK family firms stick to generational commitment
A majority of the UK’s family businesses have said they have “robust” succession plans, a process that has long been seen as having its “benefits” for the UK economy.
An Wealth & Investment study, shared exclusively with Morning Wire, shows that nine out of 10 of the family businesses surveyed have “robust” succession plans in place for the next generations, with one in three being “open” to the idea of selling.
In 2020, the UK family business sector generated £575bn and employed 13.9m people, playing an “essential role” in the UK economy, Fiona Graham, chief advocacy officer at Family Business UK, said.
She added: “Rooted in their local communities, family businesses plan for the long term with an approach that, not only puts people at the heart of their business but also make investment decisions that have the interests of the next generation in mind.
“They offer a model of sustainable and responsible business by addressing today’s complex challenges and building long-term, resilient and sustainable companies with a multigenerational investment and business strategy.
“They are not just thinking about the results for the next quarter.”
Of those planning to keep the business in the family, 91 per cent say they are confident that the next generation will make the takeover a “success”.
But while some businesses often pride themselves in an operational “family” aspect, Ashley Labrosse, managing director of telecom supplier Communications Specialist Ltd, said it’s important that it remains true.
Taking over the business from his father some 15 years ago, Labrosse said: “Installing a family value into a business brings in the right attitude and collaboration to a team.
“When every task is approached in a manner that benefits everyone and the company, growth is more easily achieved.
“When every task is approached in a manner that benefits everyone and the company, growth is more easily achieved.”
Nadine Collins, financial planning director at Investec Wealth & Investment, said succession planning is a “crucial question” to answer for any family business.
She added: “Various reliefs and structures do exist that allow families to pass business assets down the generations in a tax-efficient manner.
“A full exit from a family-run business could result in an increase to an individual’s estate above available allowances and being subject to inheritance tax where professional advice is not sought.”