You Say You Want a Revolution
20th February 2019
1968 does seem a long time ago. The Prague Spring; the assassination of Martin Luther King and Bobby Kennedy; and Manchester United became the 2nd British team to win the European Cup… But at least the Beatles were still in full flow.
The word “revolution” is overused, but we do seem have been in an almost constant state of change, evolution and – well – revolution since then. This isn’t (quite) an old fogey piece about everything changing and me not understanding (although there is some truth there) but rather about what hasn’t changed.
Anyone who has seen or, even worse, read my ramblings before will know that my focus is really on businesses. What they do right; what they do wrong; the problems they have; the whole 9 yards. But, what really interests me, is the constancy of family businesses in particular. What makes them different, survive and prosper?
Some of you may well be saying that not all survive and prosper, and that’s certainly right. But, if the comparator is public companies, then private family businesses don’t do too badly (particularly given recent and continuing issues with “big business"). So, why do family businesses survive and prosper?
Clearly, not all businesses are the same: in fact, no two are the same. But family businesses are, I think, different because of a number of factors: time horizons; generational factors; tax planning; and so on. What they are not includes:
- driven by quarterly updates to the City (so there isn’t the constant “results now” pressure)
- in thrall to non-involved shareholders ( the stakeholders in family businesses are usually, well, family)
- unaware of the community in which they operate (the customers and employees often live close to the family).
In the UK, we often look enviously at the German Mittelstand – but if you look at that Wikipedia article, you’ll see that many of the family company attributes in the UK can or might mirror those in Germany.
But – and it’s a big “but” – UK (and probably German) family companies have their own issues. They include succession, taxation and so on, which are made more complex with the added family dynamic. However, those businesses are not alone: we can help! Many of us (including me) are involved with family businesses on a daily basis. Additionally, we have a sister company - Family Business Solutions Limited – providing specialist hands on support. Between us, we may well have seen the problems that you are facing (some of them many times) and can help you not only with those but also the issues you haven’t yet thought of. So – “we can work it out”!
The information contained in this newsletter is for general guidance only and represents our understanding of relevant law and practice as at February 2019. Wright, Johnston & Mackenzie LLP cannot be held responsible for any action taken or not taken in reliance upon the contents. Specific advice should be taken on any individual matter. Transmissions to or from our email system and calls to or from our offices may be monitored and/or recorded for regulatory purposes. Authorised and regulated by the Financial Conduct Authority. Registered office: 302 St Vincent Street, Glasgow, G2 5RZ. A limited liability partnership registered in Scotland, number SO 300336.