The importance of creating a sustainable family business for the next generation

Whilst we don’t confess to having held the answers to either the pandemic or leaving the EU, we were still helping family businesses in the same way, which was through an essential process that family business owners should prioritise – Strategic business planning with a focus on succession planning.

Although we shouldn’t look to compare the impact that the EU exit and coronavirus will have on our lives in the long term, it once again highlights the importance of having a strategic plan which considers how your business will remain resilient and manage risk through a turbulent time. Family businesses tend to have a bond that corporates cannot try to emulate, however, we also see that corporates can take a harder line on making quicker and more difficult decisions in the height of evolving change periods, such as the pandemic.

The businesses that will succeed regardless of how the EU exit and Covid-19 unfolds will not be the ones who have forward bought six months of stock, or who have negotiated favourable contracts with suppliers/customers, or those that have fixed the Euro or Dollar rate for 2021/2. The businesses that will succeed will be those that have undertaken a clear assessment of their current business, have strong guiding principles around what they stand for and are trying to achieve, those that recognise the areas they can improve their current operations, and those that are open and agile to change. This involves completing a full strategic business planning exercise that incorporates scenario planning and options analysis. For family businesses, this should also include a piece around passing on the business to the next generation in a better place than it is today.

No amount of stock that is piled high in an additional warehouse will aid a business that now faces completely unexpected export tariffs, quotas or changing consumer demands, but having a clear strategic business plan will help family businesses identify how they can navigate the journey ahead.

It’s fair to say that most organisations, will need to consider adjusting their business model post-Covid-19. That could mean scaling back in less profitable areas of their business, re-deploying staff into different areas of the company, developing alternative products, targeting new geographies or customer demographics.

Whichever direction a business takes post the pandemic, it will need careful consideration and planning and it is highly unlikely that the day following lockdown restrictions being lifted, that a business will require all of the furloughed staff to return to their previous roles immediately.

With careful planning and consideration, a phased return to work for businesses could help sustain the life of an organisation into the future for much longer. This planning process needs a lot of preparation and provides every business a once in a lifetime opportunity to begin with a blank slate to design their organisational setup and team structure as they wish.

It is an opportunity to engage team leaders, departmental heads, and other senior management into the business by getting their views and ideas, and therefore helping to create a sustainable long-term company. The biggest mistake every business owner can make post-Covid 19 is returning to the same business as before the lockdown. 

Regardless, Covid-19 provides an opportunity to change. With some careful planning and scenario and stress testing, businesses will be able to not only recover, but to succeed, with stronger margins, more engaged staff, and a more resilient and agile business.

Get in touch

If you have any questions on how we can help your family business, please get in touch using the form below.

Contact us today