Two thirds of family business owners feel the next generation is not yet ready to take over, research finds.
Most respondents (56 per cent) envisage the next handover will not happen for at least ten years, according to a study by law firm Gordons.
Almost half (44 per cent) believe changes will be needed before they relinquish control, as they feel their businesses’ current ownership structures would not serve the next generation well.
More than a third (37 per cent) of respondents say they have family members who do not want to get involved in their enterprises.
Furthermore, seven in ten respondents (72 per cent) agree their families are open to bringing people into the businesses who are more skilled at running them than themselves.
Of the 20 per cent whose families did not want to recruit outsiders, the main reasons cited are losing an element of control and fears about differing interests causing conflicts.
The survey also reveals that family tensions within businesses are by no means a thing of the past. Almost half (44 per cent) of the stakeholders who have taken over their companies from previous generations feel there had been difficulties or frustrations during the transitions.
Some 50 per cent of those who have experienced these issues say the reason is the unwillingness of their forebears to surrender control.
Simon Pilling, a partner in Gordons’ corporate team says, ‘The report examines issues concerning family businesses and protecting value for future generations, including company management, finance provision, succession and wealth preservation. Its findings confirm that these matters are high on these companies’ agendas.’
Pilling adds that Gordons, which has specialist expertise in advising family businesses, had given family business stakeholders an opportunity to have their say and they had certainly taken it.
He adds, ‘Significantly, there was also a genuine shared feeling of confidence about the future, which is encouraging for the regional and wider national economy.’