West Midlands family enterprises are ‘overwhelmingly positive’ about the year ahead and are already implementing ambitious expansion plans, according to the region’s specialist support organisation for firms in the sector, Families in Business (FiB).
Family firms from across Birmingham and the Black Country met at family-owned Swinfen Hall, Lichfield, last week to discuss their plans for 2016.
The Exclusive Dinner and Discussion event, hosted by FiB, revealed an overwhelming belief that 2016 will be better for business than previous years, with family firms agreeing that diversification and a creative approach to understanding the pace of change in the region, across the UK and globally, should be used to their advantage.
Commenting on the event and the sentiment amongst the family firms taking part, FiB’s CEO Dani Saveker, said: “Family enterprise leaders from across the West Midlands joined us for the event at which we set-out to unravel the opportunities and challenges facing the region’s family business sector this year. These evenings provide a safe, supportive and highly confidential environment for leaders and executives of these entrepreneurial businesses to share thoughts, off load issues and discuss challenges. Amongst the businesses taking part were manufacturers for the air and sea sectors, packaging businesses, plant hire and pharmaceutical companies, recruitment, fire and security organisations, aged between five and 148 years and with an average annual turnover of £11million.
“All believe this year will be better than previous years, and said they are fed up with the doom and gloom across the region’s business communities and media.
“Top of the family business agenda in 2016 will be innovation, communication and skills, whilst trust is critical for working with non-executives, senior executives and external professional advisers.
“All the family firms involved were overwhelmingly positive and demonstrated ‘can do’ thinking. Raising the bar and building on strong foundations was clear,” Dani explained.
“Most critical for senior executives, is spending time working on the business rather than just within it. They also said the pace of change is accelerating, so businesses must keep up as those failing to do so will suffer, whilst those able to diversify and view the future with creativity will create an advantage.”
The event also found that cultural and commercial development is important, as Dani explained: “Acknowledging the importance of emotions and tackling relationship dynamics that play a significant role in blocking growth and progress in a family owned enterprise, must be addressed. We observe many businesses suffering due to relationships not being aligned and personal agenda’s being at odds.”
Seeking good, timely advice for stakeholders and professionalising the business by using appropriate advisers and investing in people, were also identified as key this year: “Yet again, family businesses raised the lack of skills as an issue,” said Dani. “Being able to bring in the necessary skills and infrastructures to support continued development is important, although it is not always easy to accept as a founder or owner that the business needs skills they don’t have themselves.
“If every single SME business recruited one more person we would effectively end unemployment. The lack of understanding and support, at a level that adds most value, to entrepreneurial businesses, remains extremely poor.”
Obstacles for growth were clients failing, lack of clear and shared purpose in the businesses the ability to adapt and accept change, and a lack of investment in innovation early enough, if at all.
According to FiB’s latest survey of the UK’s family businesses, professional advisers are the main source of support for business leaders, but there is a growing paradox between what professional advisers believe family members want from their businesses, and what the owners and leaders actually want, as Dani explains:
“49% are looking for growth for the family business with exit firmly in mind, 27% strive to ‘build something’ to be handed-on to the next generation, whilst 26% say they most enjoy the lifestyle the family firm enables. However, advisers are 100% focused on succession, seeing this as the main objective for all family members working in the family firm, so provide technical expertise rather than consider the associated more emotional challenge.”
FiB delivers membership, specialised peer groups and support packages, events, tools, workshops and a growing network of professional advising partners. Headquartered in the West Midlands, it joined the global organisation Shirlaws last year. Collectively, Shirlaws Group provides entrepreneurs with support across individual, family and business journeys.
Shirlaws’ UK Chairman Andy Hurst was at the event. He said: “Based on the discussions, the West Midlands’ family enterprises in the room face broadly the same issues.Above all, trust is seen as a key dynamic enabler in family businesses. Alongside, communication is vital to their success and sustainability, and the creation of a vision that’s clear and for everybody will support the expansion plans evident amongst those we spoke to.
“Equally, the region’s family firms accept the business is not just about the family members in it, but it is also about the dynamic with its managers and shareholders.
“By being positive and brave with their goals, family firms can meet challenges and issues head-on – and all agreed that banning ‘no’ in conversations is a positive base from which to begin.”
Sponsoring the event were FiB’s Advising Partners in the region – including accountancy firm Crowe Clark Whitehill, recruitment specialists Pertemps, Yorkshire Bank and Black Country law firm Higgs & Sons, whose Business Development Director Andy Ball commented: “It was great to see family businesses opening up and sharing their thoughts.”
Gareth Jones from Yorkshire Bank added: “The guests demonstrated great innovation and showed a real appetite to continue to invest in growing their businesses. I was delighted to hear how the businesses shared the fact that the all saw their people as a key strength/asset. The meaning of ‘family’ referred to all those within their business not purely family members - this value often creates huge trust and loyalty.”
A collection during the evening raised £210 for Acorns Children’s Hospice.
The event was the first in a national programme of Exclusive Dinners for family businesses and is part of FiB’s ongoing plans for events that connect family businesses so they can share experiences, support and best practice. This year’s programme will climax with FiB’s first ever National Summit on 28th and 29th September at Heythrop Hall in Oxford.