Why business planning can be a real family affair
FAMILY businesses have been described as the backbone of the north's economy. Less focused than typical Plcs on short term results, they are better able to take the long view on investment and profit taking
That, in theory, makes them more resilient when the inevitable recession bites But they often suffer from a similar weakness: lack of a clear strategy for handing over control from one generation to the next.
And that vulnerability matters because of their scale.
In today's Profit Margin, Michael McQuillan, director of Ulster University's Business Institute, says family businesses make up most of our largest locally owned firms.
In a survey last year carried out by the University in association with accountancy firm Harbinson Mulholland, it was found that family businesses occupied 72 of the 100 top positions in a league table of Northern Ireland's biggest indigenous firms.
Mr McQuillan said: “Creating the right environment for family businesses is incredibly important.”
As regards the important issue for succession, a lot of families think about it in time but, according to Mr McQuiillan, many don't until it's too late.
There are practical steps that a family business should undertake to smooth the handover.
Darren McDowell of Harbinson Mulholland said families should sit down as early as possible and work through what their plans are. The clearer the lines of communication are throughout the family the more painless the process will be when it gets closer to major events like succession.
Mr McDowell says a key step family businesses should take is to set up a family council. In turn that should lead to a family charter which though neither a legal nor financial document should address the issues of succession and other matters.
:: You can listen to the Profit Margin at www.irishnews.com/profitmargin.