Help for family businesses is at hand
At Adams Moore we provide help for family businesses quite often, as some of our clients are owners of such businesses. There are many challenges that can affect family businesses, from the day-to-day running of them, achieving harmony and of course, around tax planning.
It might be surprising to know that family businesses make up a healthy proportion of the UK’s private sector, at around 39 per cent, and accounts for 9.4 million jobs. So help for small businesses really does need to be a priority to keep this part of the economy thriving.
Agree goals and achievements from the get-go – when starting out in business with family members, it is important to talk about what the short term and long term goals are. Each family member may be at a different stage in their life and have different goals pertaining to that stage. If the business plan and strategy isn’t agreed upon at the outset, it will only lead to problems later on.
Achieving and maintaining harmony – this is of course a challenge for every business whether or not they are family run, but we all know that family members don’t always see eye to eye or agree. It is important to set rules and boundaries that every employee must adhere to, whether or not they are family. Each family member employed should have a proper role and duties within that role made clear, to avoid conflict arising from some members feeling they’re doing more than their fair share.
Ensure employees are treated equally – in the case where family and non-family members are employed by a business, there should be an extra effort made to ensure the business isn’t split into a ‘them and us’ scenario. Rewards, privileges and should be awarded on merit and not based on who is in the family. Non-family employees could easily be de-motivated by such treatment.
Avoid the mix of business with pleasure – it can be all too easy to bring work talk into home life and make individuals feel like they can’t truly switch off. Similarly, it can be all too easy for home conflicts to be brought into the workplace and continued. Set clear working hours and ensure that any work-related matters are dealt with at work by having productive meetings with a tight agenda to maintain focus.
Be open and honest – never try to hide the fact that employees are family members. Not only can a family-run business be a selling point and attraction, but with a plethora of social media channels such as LinkedIn and Facebook, it can be very easy to discover family connections within a business. Information such as this withheld can sow seeds of doubt and distrust for other employees or clients.
Seek professional help with tax planning – with family businesses, there can be issues around inheritance tax and potential liabilities for family members. Seeking professional advice in tax planning for a family business is crucial to ensure that the business is set up with the right structure to start with, that extraction of funds is being done tax efficiently and that preparations for the next generation are in place.
Anyone thinking about going into business with family should not be put off by the potential issues but instead plan for them by seeking help early on. Any potential outlay ensuring the set-up is right will more than provide a return on investment.
Want more information on help for small businesses? Get in touch on 01827 54944.