As we welcome back the HBO’s hit show Succession to our screens, we’re reminded of the trials and tribulations of the Roy family and the complexities surrounding running a family business. According to data from the Institute for Family Business, two-thirds of UK businesses are family owned generating over a quarter of UK GDP. Yet, family businesses still encounter significant challenges which are unique to their individual set up. Many family-owned businesses are run more conservatively and cautiously than their listed or private equity-owned peers, which can often manifest itself in under-investment in the future and leave companies more susceptible to disruption. This is particularly relevant with the digital revolution, where both the speed and quantum of change can cause issues.
Alongside external factors, there are many internal challenges families face - not least in succession itself. It is all too often the case that, as family operations pass through generations, the next generation is under-prepared for the transition and the root of the problem is a lack of communication and strategic dialogue.
The proverb, ‘shirtsleeves to shirtsleeves in three generations’, depicts the very real danger of declining family wealth across the generations and in this age of relentless and unprecedented disruption, protecting family interests through the generations is harder than it’s ever been. There is also the issue that family businesses are still largely being handed down to sons rather than daughters and while women are better represented at board level, compared with non-family firms, they are frequently overlooked for leadership roles.
Finally, according to research from Cynergy Bank, family businesses (15%) are more likely than non-family businesses (11%) to find access to financial services and products problematic. This is an on-going concern as confirmed by an earlier Institute for Family Business analysis which evidenced the gap between family and non-family businesses in their ability to successfully obtain finances.
This is where the right bank can help – understanding the nuances of family-owned businesses is vital in providing the right support and services to these businesses. Banks who support innovation, provide guidance as businesses navigate the complex regulatory framework and provide flexible financing options will help small family businesses realise their potential. For instance, we offer a £75m fund to support female-led family businesses and help female-led family firms make the investment they need to grow.
At Cynergy Bank, we understand the intricacies of family businesses and we provide easy, personalised banking to fully support their needs. Our relationship managers offer tailored products to meet individual needs. They make quick decisions and are available when needed for support. This is underpinned by modern, convenient technology. We are creating a digital bank for the future – high tech, high touch.