Exploring Family Business Natalie Wright, Head of Family Business at Mazars UK

A lack of succession planning is the number one reason family-owned businesses fail to survive. But for those who intend to pass on the business to the next generation, assumptions about how the transition will work without clear communication and an agreed structure can have a devastating effect on the business continuity and personal relationships.

In 2010, Gavin Howarth started working at his family business, Howarths, an HR and employment law firm. In 2013, Gavin became the Managing Director, following many open discussions and careful planning. His parents subsequently implemented the transition of ownership to Gavin, which saw him become the majority shareholder.

As a NextGen leader, Gavin has had to find his own management and leadership style to remain authentic, feel confident, maintain a good relationship with his father, and build on the values that created the business. In this episode, Gavin shares his experience so that other businesses can thrive.

Family businesses go beyond numbers. Most act according to family values and ethical principles, embrace responsible capitalism and positively impact their local communities. This means they are generally better positioned for long-term success when compared to non-family-owned enterprises.

But recent challenges, such as the pandemic, and high inflation are leading family businesses to reconsider priorities and the future. Should we expect to see an acceleration of the transition from NowGen to NextGen?

To answer this question, we invite Neil Davy and Fiona Graham of the Institute for Family Business. They also share current trends regarding family business succession, what NowGen can do to align its interests with those of the Next Gen, and what changes NextGen will bring to the family business and the UK business community.

In March 2022, the Bank of England raised interest rates by a quarter of a percent. This was quickly followed by an identical raise in May and June, bringing the base rate to 1.25%, the highest rate we’ve seen in over thirteen years. At the same time, the UK recorded inflation of nine percent, reaching a forty-year high. Considering all these macroeconomic challenges, we want to understand how they will impact family business funding in a post-pandemic economy.

David Baggott, a Director in the Mazars Deal Advisory team, joins the conversation today to explain the changes in the M&A market and how rising inflation influences the ability to raise funds, specifically regarding family and privately owned businesses.

David has over fifteen years of experience advising and supporting family businesses through different transitions. He leads the debt advisory service at Mazars, providing specialist advice to shareholders seeking investment or funding for growth, as well as funding for succession. David was also shortlisted for Young Accountant of the Year in the Insider North West Young Professionals Awards 2020.

Taking over the family business can be a real turning point, with many variables and questions. Should you follow in the footsteps of those who led before you? Do you maintain the status quo? Is now the time to leave your own mark? Is this opportunity right for you at this stage in your career?

To answer these questions, we speak with Cara Macklin, Founder and Chief Disruption Officer of Caram. Cara is a Next-Gen Entrepreneur who grew up in a second-generation family business in Northern Ireland.

In 2019, having contributed to a sizable increase in revenue, with staff numbers more than doubling and several awards under her belt, she decided to leave the family business. In 2020, Cara launched her own business, Caram, to help Next-Gen family entrepreneurs globally innovate and scale to stay ahead and forge their own paths.

Taking over a family business brings with it many responsibilities. That shift in decision-making and autonomy can affect the dynamics of the company and the family. But some families have transitioned successfully. So what made the difference for a successful transition? How difficult is it to balance personal ambitions and family legacy? And how is NextGen driving their new ideas into action?

Josie Morris, Managing Director at Woolcool, an award-winning business that now supplies products to some of the most recognized brands around the globe, answers all the questions.

Josie is the 2nd generation of Woolcool, and today, she talks about her journey and challenges in joining the family business.

Josie also shares how her family has managed the transition while maintaining strong personal relationships throughout the process.

In season 3 of Exploring Family Business, we address the topic of the NowGen to NextGen transitions. We will explore both the personal and practical aspects of handing over ownership and the management of a family business and the challenges and opportunities that change can bring.

Today, we’re joined by Alan Frost, Partner at Mazars UK. Alan advises family-owned businesses ranging from the 2nd to 4th generation. He also benefits from speaking from personal experience, as he was the 3rd and final generation in his own family’s business.

In family businesses, usually, the owners select and put relatives in the most senior positions. But Alan believes they should prepare by detaching themselves from personal connections and instead consider the requirements of the business first. A greater focus on what the business needs and what is best for the organisation and its stakeholders, is required for a successful transition of control.

Alan also shares how family businesses can prepare NextGen for leadership and decision-making roles and how to create a strategy and the framework to formalise the process.