The family business comes with its own set of rewards and challenges. True, families are often more committed to running a successful business where they have historic connections, personal ties and a reputation to protect. Similarly, family members will often have invested considerable time and money to get their business ‘off the ground’, therefore there is strong motivation to grow the company, which is also likely to be instilled in the younger generation.
On the other hand such businesses do have to think about family conflict and succession planning – often contentious areas – which can impact profits and quality of service.
Recent reports have indicated that family businesses in particular are now suffering financial burdens imposed on them by regulatory changes and government red tape measures. Indeed, adherence with corporate laws and governance can often be overlooked by such businesses who may not view regulatory compliance as fundamental to their close-knit way of working.
The impending pension auto enrolment procedures coming into force for businesses employing less than 50 members of staff is just one example of an impending financial burden that will impact small businesses. They will need to adjust their costs and invest considerably more time on paperwork and administrative duties to comply with this measure.
However when managed efficiently, with the best type of structure to suit the changing face of the business, such organisations can be competitively strong, financially sound and a substantial contributor to local economies. However taking the time to reflect, re-assess and ensure that the business has plans in place for the future – both in commercial and legal terms – is critical.
Are you an owner of a family run business and looking for some advice on any issues touched upon in this article? Arrange a complimentary review of your business with one of our business and commercial solicitors today.