Guest Blog: UK EO Award sponsor Baxendale on retaining a family business legacy
Over many years, and often over generations, family owners nurture and grow their businesses. Family businesses often have collective stewardship, responsible risk-taking and a focus on long-term business goals as their core values.
These values, combined with the family’s loyalty to their employees, commitment to a geographic location and a sense of pride in their success and independence, create the family business legacy. This is a legacy that families quite rightly strive to build upon and want to protect.
When it comes to succession planning, families often hope to find a solution that keeps the family business in the family. If family members have the talent and desire to take over when the senior generation retires, planning centres around capitalising on these talents and creating governance structures that enable the business to thrive into the next generation.
When there are no obvious successors at hand, succession planning becomes trickier.
Traditional non-family succession options, such as a trade sale or the introduction of private equity, can put the family business legacy at risk. Decisions that have an impact on the community and jobs – like diversifying the business, relocating, or even closing down altogether, are in the hands of an unrelated third party who may be indifferent to the firm’s history.
If a family wants or needs to sell, a move to employee ownership is an innovative option that allows the business to flourish while protecting what makes the family business special. At the same time, it unlocks value that has been tied up in the business creating an opportunity for the family to continue to develop their legacy independent of the family business.
When a family owns and runs the family business, the family business legacy is two intertwined legacies: family and business.