The headlines in the War for Talent are dominated by corporate giants and tech start-ups but family businesses often possess a unique allure. Beyond just their products or services, family firms can frequently craft a compelling story around their heritage, values, and sense of purpose. Leveraging this narrative through effective storytelling not only enhances the brand but also plays a pivotal role in attracting and recruiting non-family executive talent to the family enterprise. The Strength Of Family Business Branding Family businesses embody a distinct identity that sets them apart from their counterparts. Their brand narrative is not merely about profit margins; it's about heritage, resilience, and a commitment to values passed down through generations. This narrative creates a sense of authenticity that resonates with consumers and potential employees alike. The Power Of Storytelling Effective storytelling can connect the heritage and values of a family business with the aspirations of non-family executives. By creating narratives that highlight the company's journey, its impact on the community, and its genuine purpose, family businesses can evoke emotions and create a compelling story that stand out in the bland world of corporate job descriptions. A Force For Good Family businesses are often deeply ingrained in their communities, acting as pillars of support and engines of local economies. Communicating this aspect of their identity reinforces the notion that working for a family business is not just about having a job but also about making a meaningful difference in people's lives. Long-Term Vision And Sustainability One of the key attractions of family businesses for non-family executives is the ability to take a long-term view regarding investments and sustainability initiatives. By emphasizing their commitment to sustainability and responsible business practices, family firms display their dedication to creating a better future, aligning with the values of prospective talent. Combatting The 'Glass Ceiling' Perception Non-family executives may perceive family businesses as closed environments with limited opportunities for advancement beyond the family circle. Effective storytelling can dispel this fear by highlighting success stories of non-family executives who have thrived within the organization, highlighting a culture of meritocracy and inclusivity. Strategies For Effective Storytelling: Highlight Heritage and Values : Craft narratives that delve into the history of the family business, emphasizing core values that have stood the test of time. Showcase Community Impact : Share stories of how the company has positively impacted the community, whether through philanthropy, job creation, or environmental initiatives. Demonstrate Long-Term Vision : Communicate the family business's commitment to sustainability and responsible growth, illustrating how it aligns with the values of prospective talent. Feature Non-Family Success Stories : Spotlight non-family executives who have risen through the ranks, underscoring opportunities for career advancement based on merit and the firm’s approach to diversity, equality, and inclusion. E ngage Employees in Storytelling : Encourage employees to share their own experiences and stories, fostering a sense of belonging and authenticity within the organisation. Effective storytelling plays a crucial role in attracting non-family executive talent to family businesses. By harnessing the power of narrative to convey their heritage, values, and commitment to purpose-driven initiatives and diversity, family firms can overcome perceptions of a 'glass ceiling' and position themselves as dynamic and inclusive environments where non-family talent can thrive. About the Author - David Twiddle is the founder and Managing Partner of TWYD & Co, an Executive Search and Advisory firm built differently for thriving business families, entrepreneurs and ultra-high net worth individuals, around the world. Find out more at www.twyd.co

In branding, storytelling has emerged as a potent tool; for family businesses, it's not just an option but a necessity. In today's competitive landscape, where consumers seek authentic connections with brands, the narrative behind a business holds unparalleled significance. With their rich history, values, and personal touch, family businesses are uniquely poised to leverage the power of storytelling to solidify their brand presence and foster lasting relationships with customers. Let's delve into the benefits of positioning a family business as a brand, the transformative power of storytelling, and actionable strategies for crafting a compelling narrative.   The Strength Of Family Business As A Brand Family businesses inherently embody a distinct set of qualities that resonate with consumers on a deeper level:   1. Heritage and Legacy : Family businesses often boast a legacy that spans generations, imbuing them with a sense of tradition, stability, and trustworthiness. This legacy is a powerful foundation for building a brand identity rooted in authenticity and longevity.   2. Personal Connection : Unlike corporate giants, family businesses are driven by personal relationships and a genuine passion for their craft. This human element fosters emotional connections with customers, who appreciate the personal touch and commitment to quality synonymous with family-owned enterprises.   3. Values and Ethics : Family businesses prioritize integrity, responsibility, and community involvement. These core principles guide their operations and shape their brand identity, attracting socially-conscious consumers seeking brands aligned with their values.   4. Adaptability and Innovation : Many family businesses exhibit remarkable adaptability and entrepreneurial spirit despite their traditional roots. By embracing innovation while staying true to their heritage, they can position themselves as forward-thinking brands capable of evolving. Unleashing The Power Of Storytelling At the heart of effective branding lies storytelling – the art of crafting narratives that captivate audiences, evoke emotions, and forge meaningful connections. For family businesses, storytelling serves as a powerful tool for:   1. Building Authenticity : Authenticity is the cornerstone of successful branding. By sharing the story behind their family business – its origins, challenges, triumphs, and values – entrepreneurs can cultivate a sense of transparency and authenticity that resonates with consumers.   2. Connecting with Emotions : Humans are hardwired to respond to stories on an emotional level. By weaving narratives that evoke feelings of nostalgia, joy, or empathy, family businesses can forge deep emotional connections with their audience, fostering loyalty and brand advocacy.   3. Creating Differentiation : In a crowded marketplace, differentiation is vital. By leveraging their unique heritage, values, and experiences, family businesses can carve out a distinct brand identity that sets them apart from competitors and resonates with their target audience.   4. Inspiring Trust and Loyalty : Trust is the foundation of any successful brand-consumer relationship. By sharing authentic stories that highlight their commitment to quality, integrity, and customer satisfaction, family businesses can inspire trust and foster long-term loyalty among their customer base. Crafting A Compelling Narrative  Crafting a compelling narrative requires a strategic approach and attention to detail. Here are some actionable strategies for family businesses looking to leverage storytelling in their branding efforts:   1. Know Your Audience : Understand your target audience's values, aspirations, and pain points, and tailor your storytelling efforts to resonate with their needs and desires.   2. Identify Your Core Message : Define the key message you want to convey through your brand story – whether it's a commitment to craftsmanship, a dedication to family values, or a passion for innovation.   3. Highlight Your Unique Selling Proposition : Identify what sets your family business apart from competitors, whether it's your heritage, values, product quality, or customer service, and weave these unique selling points into your narrative.   4. Be Authentic and Transparent : Authenticity breeds trust. Be honest and transparent in your storytelling, acknowledging the successes and challenges shaping your family business journey.   5. Engage Across Multiple Channels : Utilise various channels – from social media and blogging to video content and experiential marketing – to share your brand story and engage with your audience on multiple levels.   Storytelling can elevate family businesses from mere enterprises to beloved brands with a loyal following. By harnessing the unique heritage, values, and experiences that define their journey, family businesses can craft compelling narratives that resonate with consumers, inspire trust and loyalty, and ultimately drive business success in an increasingly competitive marketplace. Embrace the art of storytelling, and watch as your family business transforms into a timeless brand with a story worth sharing. About the Author - Kim Adele-Randall is a Business Growth Consultant helping to unlock growth, drive transformation and empower businesses to scale and succeed. Find out more here

Storytelling isn’t just a tool for entertainment; it’s a powerful vehicle for leadership, communication, and influence. Whether you’re leading a team, presenting a business proposal, or simply trying to connect with others, mastering the art of storytelling can set you apart. During my time at UCLA Anderson, I had the privilege of taking a class called "Five Essential Stories for Leaders," taught by John Ullmen and Justin Sternberg. This class fundamentally changed my understanding of what makes a story effective and how to use storytelling as a leadership tool. The Core of Any Story: Change One of the most profound lessons from the class was the idea that at the heart of every compelling story is change. Too often, when people are asked to tell a story, they simply recount an event or share an anecdote. While these moments may be interesting, they don’t constitute a true story. For a real story to happen, there must be transformation—something must change. This change is what engages your audience, as it reflects the universal human experience of growth and learning. A story isn’t just about what happened; it’s about how those events transformed the protagonist, and by extension, how they might transform the listener. The Four Beats Of A Story To effectively convey this transformation, a story needs structure. John and Justin taught us about the four essential beats that form the backbone of any powerful story: 1. World Before Every story begins with establishing the status quo—the world as it was before the pivotal moment. This sets the stage and helps your audience understand the context and stakes. What was your life like before the change? What were you striving for, and what did you value? 2. Life Interrupted The second beat introduces the inciting incident, the moment that disrupts your world and forces you onto a new path. This interruption is crucial because it propels the story forward and introduces the conflict. It’s the moment when things start to unravel, and your previous way of life no longer works. And critically, this is something that happens to you, not something you chose to do. This part of your story shouldn’t be more than a sentence. 3. Perilous Path After the interruption, the story moves into the third beat, where you face challenges, make attempts to solve the problem, and often fail. This is the perilous path—the series of trials and tribulations that push you to your limits. In many great stories, this journey leads the protagonist to their lowest point, their proverbial rock bottom. It’s here that the true nature of the challenge is revealed, and the real transformation begins. 4. Treasure Discovered The final beat is the resolution, where you discover the treasure—a newfound wisdom, a critical lesson, or a profound realization. This is the moment of transformation, where the struggle pays off and you emerge changed, with something valuable to share. This treasure isn’t just for you; it’s the key takeaway that your audience can apply to their own lives. The Future and the Takeaway A well-crafted story doesn’t just end with the lesson learned; it looks forward. After sharing the treasure, it’s important to convey what you’re going to do in the future because of this experience. How has this transformation shaped your next steps? What changes will you make, and how will you approach the world differently? Finally, every story should leave the audience with a key takeaway and a lasting image. This is what makes your story memorable and impactful. It’s the piece that your audience will carry with them long after the story is over, inspiring them to reflect on their own experiences and consider their own transformations. Storytelling is more than just a communication skill; it’s a leadership tool that can inspire, motivate, and connect people on a deeper level. By understanding the importance of change, structuring your story around the four essential beats, and ending with a forward-looking message, you can craft narratives that resonate and lead. The lessons I learned from "Five Essential Stories for Leaders" continue to influence how I approach storytelling in both my personal and professional life. "Remember, every great story has the power to change not just the storyteller, but also the audience." About the Author - Kyler Gilbert is a Consultant and Vice President at Business Consulting Resources (BCR), a family owned professional services organisation that has been championing successful transformations for 40 years. They provide a comprehensive portfolio of consulting service solutions to help solve complex problems. Find out more about their work with family businesses here

Family businesses that foster a culture of intergenerational connections and a long-term vision include a robust set of family values and stories to pass on to future generations. Understanding the language of family mythology and the behaviour of narrative processes can help positively transform the purpose of the legacy and the meaning of its transmission to future generations.   After more than two decades working as a family business advisor, I have found an unbreakable connection of the history of the venture that created their wealth and legacy, with the classical archetype of the hero and his journey.   A Family Business With A Thousand Faces In his 1949 book,  The Hero with a Thousand Faces , anthropologist Joseph Campbell proposed the term  monomyth  as a universal mythological structure, applicable to all societies or groups of individuals that have built, over at least three generations, a collective identity.   In the extensive catalogue described in his work, he names the stories of the Buddha, Ulysses, the original African woman Massassi, Gilgamesh, Jesus or Quetzalcoatl, as some of the examples of universal characters who identify with the pattern of the hero's journey, which is divided into three basic stages or acts of narration: separation from the world (X), penetration to a type of power source (Y) and return with a grown life (Z).   In the first stage, the hero is an ordinary character who undertakes an extraordinary journey following a “call” (which he initially rejects) to enter an unknown world, full of mysterious powers and characters and strange events.   Once passes the threshold that separates him from his home world, the hero will face different tasks and tests, either alone or with help. However, there is one crucial test that the hero must complete to overcome death and receive a reward. Once completed, the hero must decide whether to return to the ordinary world with the obtained gift.   If the hero chooses to return, he will face new challenges on the way back to the ordinary world, including acceptance (or not) by those who have not left their original world. If his return is triumphant, the hero uses the blessing or reward to improve people and bring justice.   Applying The Model The collection of information is done during the consulting process, in sessions where the data was sorted as the information was generated organically with the family members, with temporary leaps forward and backward, revealing, discovering and remembering the most important references and testimonies that were outlining the structure, important characters and their interactions, places, objects, business achievements and other facts of the environment that frame the entire narrative, until creating a coherent composition based on the model that we have previously explained.   Building family storytelling based on the structure of the myth of the founder, is a cohesive function of legend-making that helps order their collective memories and give coherent meaning to their values transmission, especially businesses in second and third generation stages.   Also, storytelling ability depends on the capability to listen actively. In reconstructing a shared past, compassionate and empathetic listeners with the approval to question and express curiosity, even about painful events, are vital for values transmission.   Books, comic books, video testimonials and life documental films can use this structured information as a vehicle to reinforce the message of family values, lessons, and principles for the next generations. Storytelling Benefits The creative direction in the construction of family storytelling helps us to order and give coherent meaning to the story and its messages. Some of these collected lessons can be:   For the Founders:  The hero must return from the magical world (retirement). You must share the elixir with others. You will leave undoubtedly a legacy. You deserve a recognition.   For the Next Generations: We can all be a hero. It is okay to be afraid. You will have help. You’re not alone. A defeat is not the end of the road.                                                                   Shared stories serve as a means of transmitting and preserving the founder’s vision from generation to generation. However, each generation can enrich the transmitted stories. As responsible for a shared legacy, family leaders can transform the myth and feed a group image of their past, highlighting an ancestor with a particular heroic behaviour: “A myth cannot be artificially created or destroyed, but it can be modified” (Joseph Campbell).   Although most of families can identify the need to commit on preserving and legitimate their memory, some cannot achieve it by their selves. In these cases, specialized advisors have an essential role as guides for a creative process that is both mouldable and healing, positively influencing the level of family business innovation and entrepreneurship, motivating next generations to commit to the long-term success.   The hero’s journey as a healing tool that makes conscious the unconscious, is based on the power of the monomyth that has supported civilizations for millennia, exploring internal mysteries and rites of passage. Stories focusing on past achievements and resilience provide enterprising families with learnings that remains impressed on their consciousness using their own words. It is not the experience of life itself, but the meaning the family gives it. My best advice is: Know yourself and know your family. About the Author - Guillermo is the founder of Exaudi Family Business Consulting . He is a lecturer, educator, author, and expert advisor on family governance, strategic succession planning, generational transition, and conflict resolution. He is an FFI Fellow. Guillermo is the recipient of the 2015 FFI International Achievement Award.

New research for the Dying Matters Coalition shows that the majority of people in Britain have not discussed or made any plans for when they die. As a result, they are risking not getting appropriate end of life care and making it harder for their families to deal with bereavement. The British Social Attitudes (BSA) research found encouraging signs that older people are increasingly taking action to make their end of life wishes known, but that most people are leaving it too late to face up to their own mortality. This is despite the fact that almost two-thirds of us have been bereaved in the last five years. The study revealed that although 70 per cent of the public say they are comfortable talking about death, most of us haven’t done anything to discuss our end of life wishes or put plans in place. It also found that only just over one in three people have a will, down on 39 per cent in 2009, with the impact of economic pressures being a possible cause of this decline. Fewer than a third of people have registered as an organ donor or have a donor card – although the number of organ donations after death has risen by 50% since 2008, more than 1,000 people on the transplant waiting list die each year. Only 11 per cent of people have written down their funeral wishes or made a funeral plan. Despite heightened public anxiety over care of the dying, including concerns about the implementation of the Liverpool Care Pathway, and the Francis Inquiry into failings at Stafford Hospital, the British Social Attitudes findings reveal that just one in twenty of us has an advance care plan, which sets out how we would want to be cared for if we couldn’t make decisions ourselves, for example, would we want to be resuscitated. The research also revealed a major mismatch between where people want to die and where people do currently die. Latest NHS figures show that more than half of us die in hospital. Yet today’s research shows that just seven per cent of us would prefer to die in hospital, compared with two-thirds who would prefer to die at home. This is the first time the authoritative British Social Attitudes survey has asked these questions about dying, although comparisons can be made with similar research carried out in 2009. This shows that older people are becoming more likely to make their end of life wishes known. If applied to the whole British population, today’s findings show that an extra 200,000 people aged 55-75 reported feeling comfortable talking about death in 2012, when the BSA research took place, compared with 2009. It also shows that 400,000 more people aged 55-75 have discussed their end of life wishes or have some written plan for end of life in 2012, compared with 2009. Eve Richardson, Chief Executive of the Dying Matters Coalition and the National Council for Palliative Care, said that while the findings were encouraging, it is clear more needs to be done. She said: “It’s encouraging that older people are becoming more comfortable discussing dying and their end of life wishes, but as a nation too many of us are still shunning the conversations that can help avoid heartbreak and regret at the end of life. You don’t have to be ill or dying to make plans for your future, which is why we are calling on people across the country to take practical steps by writing a will, recording their funeral wishes, planning their future care and support, considering registering as an organ donor and telling loved ones their wishes.” Professor Mayur Lakhani, Chair of the Dying Matters Coalition and a practising GP, said: “There are powerful benefits of having early conversations with people who are approaching the end of their life, as it puts them in control and gives a chance to resolve any life issues. It also means that plans can be made for people to get the care and support that is right for them.” “While more of us than ever are living to a ripe old age, people are also living for longer with dementia and other life limiting conditions, which makes it especially important to talk more openly about the care and support we would want. It’s only by having the conversations that matter and planning ahead that care of the dying will be improved and people will get their end of life wishes met.” Penny Young, Chief Executive of NatCen Social Research, added: “The findings are an excellent example of what the British Social Attitudes survey is for. Most people in our study have discussed dying and many have strong opinions about the end of their life, yet very few have taken any steps to prepare for death" "Understanding public attitudes and behaviour around this important public policy issue is essential for organisations like the Dying Matters Coalition if they are to raise awareness and influence policymakers.”

Sustainability is an age-old problem for businesses of all shapes and sizes across the entrepreneurial landscape. Measuring the success of non-family businesses is typically generational, whereas the judgement on family businesses is over a longer timeframe with sustainability analysed over decades. Considering that one job in three within the UK is family business-based (IFB 2008), an understanding of the phenomenon which leads to the vast majority of family businesses failing to progress to the second generation and even fewer to the third is essential. In short, why do so few family businesses succeed at sustainability with only 1 in 10 surviving to the third generation (BERR). The ability of the family business to disseminate the tacit and explicit knowledge required to deliver competitive advantage is at the heart of the successful succession. The central drive for sustainability, coupled with familial ownership and management, delivers a unique identity. The stakeholders of the succession process are the family, the founder, the successors and the advisers. Each can be a significant reason for success and equally the cause of failure. The article will continue by discussing these areas along with conflict which acts as a further primary cause of the family business breakdown. The Successors’ Role Lost tacit knowledge and the inappropriate replication of old decisions can lead to poor quality successors and an inability to deliver the same added value as the previous generation. Encouraging the potential successor to gain external commercial experience and either quality educational or practical expertise will provide the tools to aid independent decision making. It is important that this encouragement does not lead to a stifling sense of pre-destiny but provides the opportunity to develop ideas and independence. The Role Of The Founder The majority of founders refuse to discuss succession plans and continually change retirement plans and dates, aiming for an individual sustainability. The perception of indispensability becomes endemic and represses the next generation; so firm plans are needed to avoid the ‘just five more years’ sentiment. The overall strategy for the founder will include addressing their financial, business, family and psychological concerns amidst a backdrop of a strong board and an established peer network to enhance the succession potential. The founder can further play a part by helping to develop a robust family business culture that will endure without their central leadership. Areas Of Conflict And Resolution Conflict can greatly affect the chances of developing a sustainable family business through the generations. Typical conflict issues include the capacity and capability of the successor, family issues that directly affect the business, poor communication, and non-executive shareholder issues. Non-executive family shareholders are those individuals or groups that hold an ownership stake but are not part of the day-to-day running of the business. Arguments typically develop around the direction of the business, the dividend policies, the executive remuneration policy, the succession policies and other family employment rules. The implementation of a family charter and family council can go some way to addressing these associated issues and can give a formal feedback channel to address emergent and long-term issues that the family members face with the help of advisers. The Role Of Advisers Trusted, knowledgeable and experienced advisers can deliver detailed input to the succession strategy via skills audits, family charters, forecasts and business plans or they may simply act as a sounding board throughout the process. Family Matters Integral to succession success are the actions of the family. The introduction of the family charter can aid the long-term reduction of conflict. Included in the charter would be a set of rules on the entry and exit of family members to the business, capital rights of each participant, the salary and bonus structure enjoyed by the members, and a route for mediation resolution. Evidently, the facets of the family business problem are inter-related, no more so than the connections between founder and successor which exist in adult-child and founder-successor forms. This creates tensions and blurred bonds that will often drive the ultimate outcomes and sustainability. It is important that the relationship becomes an adult-to-adult rather than adult-to-child during the antecedent phase of the succession process. This will create the change dynamic and aid the removal of ambivalence via a combined professional-emotional bond. Bringing together the pertinent complex issues and strategising as a whole leads to enhanced opportunities for the sustainability of a key part of the global economy; family business. Of Course It Matters… This article began by asking whether sustainability in family business matters before moving onto a strategy for improving the success rate. Maybe there is space for an alternative view of family business sustainability that takes a step back from the prescribed wisdom. It may be worth considering that a large number of family businesses only ever intend to ‘survive’ for one generation; the available figures for survival rates do not examine the thousands of businesses that provide funds and resources to the next generation and their successors to continue entrepreneurial endeavours outside of the banner of the initial family business. The ‘failure’ rates may be hiding a sustainable business family ethic developed from within the initial family business too. About the Author - Richard Alun Jones, Commercial Finance Director who can be contacted on rjones@accural.co.uk

When it comes to family business, one of the biggest challenges they face in the near full employment economy in which they operate is the recruitment and retention of staff. The culture of any organisation determines many things and can have a real bearing on the staffing conundrum. Our recent attendance at the Institute for Family Business national conference clarified the cultural impact on family firms even further. The next generation of employees, current graduates and school leavers have very different career objectives to many of their predecessors, whether it is in regard to working hours, ways of working, working practices or simply looking for a role with a purpose. Professor Veronica Hope Hailey from the University of Bath was clear that the right approach that is already adopted by many of the 5 million family firms across the UK today with regards purpose and values should stand them in good stead, and make the 21st century, THE century for family firms. Purpose and values serve much more than simply words. They help to define the culture of a business, a way of working and a real set of values that should permeate the entire workforce, creating a unique environment to work and service the needs of customers. The culture is also shaped by the leadership of the business, often over generations with different generations helping to shape the business for subsequent generations too. Over time, different family firms will inevitably create a culture of inter-generational collaboration, something that can take various forms, not least at an extreme level the destruction of the history wall, only for two generations to then work together to rebuild it with a better impact as the end result! Culture needs to be worked for, values lived and breathed, with leadership demonstrating the values to which they subscribe each and every day. Creation of successful family business culture and good governance through the existence of a successful board culture is also important, and in this regard the roles of both family and non-family members are key. Obviously, with the wrong people on the board and the wrong chair in place, family or non family, can lead to the creation of an unsuccessful culture that can create all sorts of challenges going forward. Culture is not only defined by a set of values but also the history and heritage of the organisation, something that is clearly apparent in long standing, multi-generation family businesses. Younger family firms also have their own culture too. However, over time, it is inevitable that the roles and impact of previous generations on the culture of the family firm becomes more apparent, the stories and anecdotes from previous generations playing their part, as does the fact that in many of these businesses multiple generations of families have worked for the businesses too, creating a unique mix of pride, determination and passion to continue. Never under-estimate the power of culture within the context of the family business. It can be a truly powerful force and a clear point of difference in a competitive market place, adding real value to the business and the relationships with stakeholders and helping in the battle to attract, recruit and retain the workforce for the next generation too. About the Author - Ben Fowler is the Managing Director of Western Pension Solutions , a specialist pension consultancy that provides strategic advice to family businesses for managing their legacy defined benefit pension schemes. Following their success in managing the Vestey pension scheme, they were founded by Ben Fowler and the Vestey family with the clear purpose of helping other families solve their pension issues in ways that are fully aligned with their objectives as business owners. All their client relationships are led by people experienced in understanding how the complex dynamics of family, business and ownership translate into an effective pension strategy.

Are management buy-outs a means of ensuring viable futures for established family businesses? Selling or handing over the family business will be one of the most difficult decisions a family will make and many different alternatives will have been explored. Neil Orford explains more. More often than not, management and employees hold the key. Their loyalty, commitment and knowledge of the core values of the business mean that they can become the natural choice as successors. The climate has never been better for the management team to take up the once in a lifetime opportunity of acquiring ownership of the business from its shareholders – the cost of finance is relatively low, venture capitalists have money burning holes in their pockets and company values remain at sensible levels. A Management Buy-Out (‘MBO’) works well for the vendors too. Vendors can test the feasibility of the buy-out before presenting the opportunity to management and they can sleep comfortably in the knowledge that their business will not be subjected to the commercially sensitive scrutiny of a trade buyer. There are a number of advantages and disadvantages associated with MBO’s and careful consideration needs to be given to these prior to proceeding down the route of one. Advantages of an MBO Management work in the business and therefore have an understanding of the operation and can make the MBO process easier Significantly reduced due diligence requirements Potentially reduced warranties and indemnities, reducing comeback against the vendor Some businesses/market sectors do not lend themselves to trade sales and therefore an MBO can be a way of exiting successfully. Disadvantages of an MBO Failure to complete an MBO can ultimately make the management’s position untenable Consideration received for a business by a vendor is typically discounted compared to what can be obtained when selling the company on the open market MBO’s often include some form of deferred consideration, which may not meet the immediate cash expectations of the vendor. The first concern of many managers who are given the opportunity to participate in a buy-out is ‘how much will I need to invest personally?’ In most buy-outs, the bulk of the finance required to fund the acquisition is provided by banks, asset funders, venture capitalists or the vendors. An investment from the management team is helpful in securing the funds required, not because of the size of the investment, but more importantly for external funders it demonstrates the commitment of the management team to the buyout. The buy-out process can be complex and the management team will have to accept that the financial gearing in the business, due to the external investment, will be higher and any funders will keep a close eye on progress. But if the management team are confident in their ability to deliver the plan and grow the business then their financial reward can be significant.

Established by Sir William Hastings in the late 1960’s, Hastings Hotels is a family-owned company and the largest independent hotel group in Northern Ireland. Legacy is important to them. Very much a family business, all four of Sir William’s children joined the group and are now in the roles of Managing Director, Sales Director, Marketing Director and Events Director. Although it has not been all plain sailing over the last 50 years for Hastings Hotels, Howard Hastings, Managing Director of the group, shares how their purpose and values have helped the company grow from strength to strength, including their latest landmark addition, the Grand Central Hotel in Belfast. “We’ve always seen the need to participate and develop relationships that speak more to the family values than to the financial return,” explains Howard Hastings, Managing Director of the Hastings Hotels Group. Howard Hastings and his sisters learned their craft from their father, as Howard recalls. “He grew the business from pubs into hotels and was strongly guided by his business outlook which he learned from his father and brother. Often he would share those lessons with my sisters and I, so we grew up learning it too. We are fortunate to have such a clear sense of values which include not only a work ethic but reflect the morals of the company too. For us it is vital that the business equally respects fellow family members as well as our staff, suppliers and clients.” Hastings Hotels is a source of pride to many in Northern Ireland. Commitment to their region is part of who they are and brings its own rewards, Howard explains. “We feel very much that we are a full-service professional hospitality company, based and grounded in Northern Ireland and it’s the last that dictates our social corporate responsibility. We work with local suppliers and use local produce because it makes good business sense. We are not concerned to pay more for local produce, because it’s more than made up for in the stories that we tell about where that produce comes from, and that in turn allows us to get a premium in the marketplace.” Their contribution goes far beyond sourcing goods, as Howard points out. “My father was a staunch supporter of several causes down the years, but only those in which he felt he could add value by immersing himself in what they did. We support locally-based causes because of that ability to add value to something that’s going on. We’ve also always had a participative view of working in our community, joining governance bodies like Tourism Ireland, Tourism Northern Ireland, and Visit Belfast, as well as representing our sector in the wider business like the Institute of Directors. We believe it is important to the business and the sector, and we also develop strong links with colleges including Belfast Metropolitan and universities like Ulster University, which are a source of potential recruits for us.” Into Dad’s business Asked about attracting the next generation to the family business, Howard believes the challenge for a regionally-based service sector family business is delivering local services, and to be sufficiently attractive that the next generation wants to participate. “Being global citizens they want to travel more and gain their own skill sets. The best part is they aren’t necessarily what we think they are or what our generation thinks they are.” He looks to the impact this will deliver in the future: “Today’s generation have a range of opportunity for learning and experience open to them, that will enable them to bring a greater range of skill sets to the business.” “One of the things that manages to ensure a sense of purpose, and keep the peace, is that each of the family members is very fulfilled in their individual role.” Investing in people Howard also believes it is important to look beyond the family, “We’ve a long history of wanting to give opportunities to new entrants to train and develop with us. That may not be widely shared with all parts of our industry, but it’s becoming increasingly recognised as an important benefit of working with our company. That’s good because it’s a reputation that takes a long time to establish. I believe the retention level of our staff is important, in an industry where that’s traditionally an issue; and by offering employment to people of all skill levels, as well as opportunities to grow and develop within the company, we enjoy strong retention. The company is big enough that the extent of family membership participation is not the same barrier to progress for non-family members that it might be in a much smaller organisation.” It’s clear that Howard and his sisters inherited a strong sense of purpose from their father to grow their prestigious hotels group in Northern Ireland, supporting local suppliers and the tourism industry. This has not limited their horizons. If anything the transformation of landmark hotels like the Grand Central have helped grow the region’s profile overseas, helping to attract more international spend. All good business sense. This article was first published by PwC as part of their Family Business Survey. It has been reproduced with their permission. Visit their website here to find out more.

So how do families ensure that the next generation has that spark? Recent research suggests that, perhaps surprisingly, story-telling plays a big role. If you ask a family what are the aims of their business – what is is for – they usually come up with a mix of financial and non-financial goals such as maintaining a good standard of living, keeping the business in the family, creating employment for other families, and social status. Making money is not the aim of being in business. But it is a prerequisite for everything else. And increasingly these days families understand that re-invention – or innovation, or entrepreneurship – is vital to the continued success of a business. So how do families ensure that the next generation has that spark? Recent research suggests that, perhaps surprisingly, story-telling plays a big role. Earlier this year a study To Be or Not to Be: How Family Firms Manage Family and Commercial Logics in Succession was published, which examined 21 wine-producing families from Germany, all of which were in the process of changing ownership from one generation to the next. This was a fairly unusual group of families, with an average age of 11 generations (the oldest was in the 33rd). The study found that the most entrepreneurial families tended to do certain things, such as insist that the next generation had practical training. They tended to have one owner, rather than dispersed ownership. They also found that the most entrepreneurial families were all good at telling stories about themselves. “The innovative families have what we call an ‘Entrepreneurial Legacy’ that is passed from each generation to the next: a narrative about the family’s achievements and how it survived tough times,” wrote the authors in a recent Wall Street Journal article. An example was the “great-great-great-great-uncle who rode his horse to Paris to repurchase the family winery at auction after it was seized by Napoleon.” The authors add: “Stories of how the family overcame theft, natural disasters, economic hardship and war are told repeatedly at the dinner table and family gatherings.” Why is this so important? One reason, theorise the academics, is that it gives the current generation a sense of perspective. “It is hard to complain about losing a customer knowing your great-grandparents overcame war and starvation to build the business,” they write. A second reason that story-telling is important is that it can be used to explain and frame the current owner’s decisions, to describe them in a way that makes them seem continuous with the activities of the past. Nobody did this as obviously – or expansively – as Alberto Alessi, the heir of a successful but not-very-sexy Italian manufacturing business which made cutlery and coffee pots who turned it into a design empire whose products are displayed in art galleries. A group of British academics have written a wonderful paper about this, called Succession Narratives in Family Business: The Case of Alessi, in which they describe how third-generation Alberto, who joined his family business in 1970, utterly changed its focus. He obviously made many “standard” business decisions during his career, but also engaged in “intense narrative activity”, as the paper puts it, and they argue that “Alberto’s strategic construction of a family firm succession narrative was pivotal” to the business’s change of direction. This – as much as his commercial success – enabled him to take control of the business. Alberto Alessi published four books, in 1979, 1989, 1998, and 2010, which total 718 pages. He used various “themes” and “storylines” throughout his writings to “legitimise” his succession and innovations. Alberto spent a lot of time – and one entire book, in fact – to explaining that his decisions and actions were continuous with those taken by his forebears. He describes that book as: “The tale of how a deep-rooted, hard, traditional and perhaps even inward looking manufacturing tradition has blossomed into our own business venture, on the contrary characterized by constant innovation, open to experimentation and to the paradoxical results of casting from a poetic mould.” This is described as a natural evolution, rather than a radical departure. The books are peppered with photos of the family at work and socialising, which casts Alberto as someone who respects his family’s traditions. As the study’s authors write: “On the one hand, the successor construes him/herself as an innovator as well as a caretaker of family traditions, rather than as a revolutionary figure in the firm who does everything anew and on his/her own. On the other hand, the strategic references to the actions of ancestors and relatives, as well as the warm tone of such references, underscore that the successor greatly values his or her family ties and family history.” Alberto used other narrative techniques, and even re-frames commercial failures as triumphs in the sense that he continued with these innovative products despite them losing money. As such, he positions himself as dedicated to innovation – just as he says the older generations were. One of Alberto’s books includes photographs of old Alessi products, which are described as underappreciated wonders of Italian design. These are not just tea-pots and fruit-holders, but the precursors of Alessi’s classic 1980s products. That Alberto was successful – in taking over the business, and in turning it into a globally-recognised design brand – shows that his method has merit. The lesson here is that understanding a business is not just about understanding spreadsheets, product and markets. It is also about knowing “what is this business for?”, which ultimately involves answering the deep questions “who am I?”, and “what should I do?” Only by telling stories can you work those things out – and the better your stories, the clearer your answers.

The post-COVID bounce back in M&A deals has led a lot of entrepreneurs to consider selling their businesses. Business owners are aware that today’s extremely healthy M&A market will not continue indefinitely and that the window of opportunity will soon begin to close. This paper looks at the most common legal pitfalls encountered by entrepreneurs selling their businesses, as seen by the Corporate and Private Wealth teams at Forsters . These teams have decades of experience in advising entrepreneurs on business exits. They know the steps every entrepreneur needs to take to get a business in the best legal shape for an exit, as well as what they need to do to manage the tax bill on their gains and maximise the wealth they secure for their families. Get your business paperwork in order – bidders worry they will be buying problems. A business with its paperwork in order reassures potential bidders – they will see it as lower-risk and more likely to result in a quick, clean transaction. The Corporate team at Forsters often advises entrepreneurs on how best to clean up their paperwork and make their businesses as attractive as possible. The biggest issues they see most often are: 1 - Renegotiate business debts if necessary – don’t leave it to the buyer Not having long-term control over the cost of debt of a target business can be an issue that puts off potential acquirers. Any loan renegotiations that need to take place should be concluded before you open the business’s books to a bidder. Failing to deal with the problem risks them walking away or lowering their bid. 2 - Extend the business’s property leases if they are running out – it makes the business more attractive to an acquirer A potential acquirer will likely be uncomfortable if a lease on a key property used by the business – an office, factory or retail site – is coming up for renewal shortly after the purchase. Having certainty over future costs is valuable, as is avoiding the disruption of relocating the business. It is well worth getting renegotiations with landlords underway a year ahead of your projected exit point. 3 - Formalise any ‘gentlemen’s agreements’ with staff, suppliers and customers Another common issue that acquirers dislike is if a business has failed to formalise the agreements it has with its key staff, suppliers and customers. Far too many businesses still operate on long-forgotten ‘gentlemen’s agreements’ with key staff. Senior team members who have been with the business for many years may not have formal contracts in place, creating a risk that they could quickly walk away from the business following an acquisition. Bidders will want to see that senior staff are contractually incentivised to stay with the business for at least 12 months and have oversight of the costs, including their pensions, bonuses, profit shares and any other remuneration. The same goes for contracts with important customers – it is common to find formal arrangements that expired long ago and have continued on an informal basis. This creates the potential for key clients to be lost without notice periods, impacting turnover without warning. This risk can impact a valuation or a bidder’s willingness to move forward with a purchase. If this is the case in your business, rectify it before starting the sale process. 4 - Update the shareholder register to avoid costly disputes Another common issue, especially for startups in industries like technology, is the granting of equity to key staff. While this can be an excellent way to retain important contributors to business growth, if it is done informally and the shareholder register is not properly updated, it can trigger costly and avoidable disputes. If these informal grants of equity were made several years earlier, recollections of the details often differ between the parties and misunderstandings can become litigation when an offer is made for the business. Sit down with those key staff members as early as possible, formalise their stake in the business and update the shareholder register. 5 - Make sure any IP the business holds is protected by patents and trademarks More and more businesses are seeing the value of the intellectual property they hold make up a significant percentage of their valuation, but this IP only has real value if it is protected by patents and trademarks. Entrepreneurs have seen potential bidders walk away from negotiations after finding that IP the business relies upon is not protected, risking devaluing their investment in the future. Taking advice from an intellectual property lawyer is vitally important if your business has proprietary systems or owns market-facing brands that form part of its value. 6 - Deal with any difficult ‘legacy issues’ the business has Bidders are always on the lookout for anything they might deem to be ‘skeletons in the closet’ for a business. During a business’s early years, entrepreneurs often file issues away under ‘to be dealt with later’. The Corporate team at Forsters say examples of this kind of issue that entrepreneurs may have to deal with before they try to sell their businesses include: 7 - Ensure the business used furlough properly – and deal with it if there are any problems In the early days of the pandemic, there was plenty of confusion around the furlough scheme and a lot of businesses made claims that later turned out to be in error. HMRC is now hunting down businesses that owe money because of incorrect furlough claims. It is far better to deal with these issues proactively rather than waiting in hope that HMRC misses it. There are likely to be significant penalties for businesses that made claims HMRC deems to have been ‘fraudulent’ and there will be little sympathy for those who did not come forward to report it voluntarily. Acquirers will not be keen to purchase a business with a risk of this kind. 8 - Unwind any ‘problematic’ transactions from the company’s history It’s not particularly unusual for businesses to have long-buried compliance issues dating back to their early days as a start-up. When the books are turned over to a potential bidder, those issues have a tendency to come back to the surface. If, for example, a director purchased a car for personal use through the business, it can be a significant red flag to an acquirer that there are other governance problems. Any business owner with issues of this kind would be well advised to unwind any of these transactions before they put an M&A deal at risk. 9 - Prepare your heirs inheritance by getting your taxes in order A key driver for many entrepreneurs to build a business in the first place is the desire to provide wealth and comfort to their families. A key part of being able to do this successfully is to prepare your personal tax situation to maximise your gains – and by extension, their gains – from selling your business. The Private Wealth team at Forsters say that the two big issues for entrepreneurs to be aware of here are: 1 - Don’t gift your children cash from the sale – you may overpay tax, and you will miss the chance to protect the money (e.g. from divorce) It is common for entrepreneurs to want to pass on some of the capital generated by the sale of a business to their children. Taking advice on the most tax-efficient way to do this is important. Completing the sale then gifting your children cash is rarely the best way. Capital Gains Tax savings can be made if shares are given to children before the sale. Also, shares in a business typically qualify for Business Property Relief (BPR) from inheritance tax, which means that before the sale there is a unique opportunity to transfer assets into trust for the children. After the sale, a gift of cash into trust would suffer an immediate 20% inheritance tax charge. Having assets in trust can ensure that the children receive benefits only as and when they are ready, and can provide protection on divorce. An outright gift of cash offers no such protection. 2 - Be careful about leaving too much cash in the business – your heirs will end up paying too much IHT As mentioned, one of the key tax reliefs available for entrepreneurs passing on shares to their children is Business Property Relief (BPR). But if there is too much cash in the business, the relief may be limited. Make sure there is a solid rationale for the business holding cash, such as a planned programme of capital investment. Ensure this is documented and that your heirs stick to the plan. Think about how to manage your own capital gains tax bill Capital Gains Tax can act as a significant deterrent to entrepreneurialism. Even the Government recognises this, having put in place tax reliefs like Business Asset Disposal Relief (formerly Entrepreneurs Relief) to encourage investment in business growth. The Private Wealth team at Forsters say that this relief is not the only way for entrepreneurs to reduce their CGT bills when they exit a business. Planning to move abroad after selling your business? Consider doing it before that to reduce your CGT bill. Many entrepreneurs plan a relaxing retirement overseas once they have exited their business. However, few consider the possibility of moving overseas before the sale of their business, which can offer significant tax advantages. If you become resident outside the UK for tax purposes for six years, you may not be liable to UK CGT on the sale of your business during that time. If it works for your personal circumstances, it may be worth accelerating your permanent move out of the UK to save yourself what is likely to be a very substantial tax bill. Becoming a serial entrepreneur? Business Asset Rollover Relief can defer your CGT bill while you grow your wealth. Business Asset Rollover Relief (BARR) allows an entrepreneur to defer the payment of a CGT bill by investing their capital gain into a new business. The CGT bill from the first business sale doesn’t become payable until the second business is sold. That can be very powerful – if your second business is successful, your personal wealth may make the CGT bill from the first business relatively insignificant. Final thoughts... For an entrepreneur, making the most of the post-COVID bounce back in the M&A market is possible so long as you take the right advice. Just as when building the business in the first place, preparation is important. Your business didn’t become successful by chance – it became successful through careful planning and wise decision making. Apply the same approach to your exit and you give yourself the best chance of a smooth transaction and an optimal price. This article is available to download or print as a pdf below:

People wish they had asked relatives more about their life when they were alive – after discovering an interesting story once they had passed. In the lead up to Remembrance Sunday, a study of 2,000 people found 53 per cent have learned something they hadn’t previously known about a family member after they had passed away. Discoveries included tales of their wartime experiences (29 per cent), their childhood (28 per cent) and where they had travelled (23 per cent). Stories were uncovered through speaking to others who knew relatives when they were younger (49 per cent) and discussions with the wider family (45 per cent). Of those who have discovered something about their relatives’ lives, 51 per cent admitted it left them with more unanswered questions while a further 45 per cent felt closer to their family. The research, commissioned by Ancestry.co.uk, found a further 43 per cent discovered a revelation when clearing out their relative’s home. A quarter of those polled regret not speaking to their relatives more about their wartime stories in particular and 22 per cent would love to discover an unknown war related tale within their family history. To inspire people to discover their own stories, the family history brand teamed up with poet Nikita Gill this Remembrance to create an emotive new poem, ‘Who You Are’ – recounting some of the untold personal experiences from the First and Second World Wars found in records found on Ancestry. Nikita Gill said: “Both my grandfathers were in the Indian Army during the Second World War, so I felt like I had a real connection to the subject matter.” “I wanted to do justice to the stories of ordinary people who lived during a time of great change and uncertainty.” “My experience of using the wealth of UK and Ireland wartime records available on Ancestry as inspiration demonstrated how even the simplest of records can tell such interesting and poignant stories.” Simon Pearce, military history expert at Ancestry, said: “Britain’s wartime history is full of fascinating accounts that shed light on how our ancestors once lived, and yet there are still so many stories to be discovered.” “In fact, our research highlights how many people have unearthed a story about their own family’s history after a relative has passed, showcasing the importance of having those discussions now to ensure these stories live on.” The research also found such discoveries left people feeling intrigued (32 per cent), shocked (26 per cent) and proud (25 per cent). Among the top things respondents found from relatives after they passed were photos (28 per cent), physical heirlooms (19 per cent) and letters (19 per cent). Of those polled, 39 per cent also admitted they are not familiar with trench poetry – poems written by soldiers during the First World War to express their experiences. Yet 31 per cent feel finding their ancestors’ creative writing would help them feel closer to them. More than a fifth (22 per cent) would love to discover an unknown war related tale within their family history. While 21 per cent admitted that although they know their family member was alive during the war and served, they don’t know what role they played. Other topics Brits wish they’d discussed more with loved ones included the hobbies they had growing up (20 per cent), what jobs they had (19 per cent) and where they met their partner (19 per cent). And when it comes to their ancestors’ experiences of wartime, people would be interested to know how their family members found rationing (18 per cent), the role they played (22 per cent) and who else they met during that time (17 per cent). While 29 per cent would like to discover a family story related to life on the front line, a further quarter (25 per cent) would enjoy hearing about a wartime love story. More than 40 per cent of those polled via OnePoll admitted they don’t really know their family’s history. Ancestry.co.uk is offering free access to billions of UK and Ireland wartime records from November 4th – 8th to help people discover their own family wartime stories. As Paul Andrews, Founder and CEO of Family Business United explains, “From a family business perspective, appreciating the role of founders and previous generations of the family firm is important as their legacy helps to shape the business and what it has become today.” “Every family is rich with its own narrative, characters that have played a role in the history of the business and it is important that these stories are captured. There are so many ways to capture the rich tapestry of life that every family business represents and we should all take stock from time to time, capture and catalogue the stories and memories from the people that matter before they are lost forever,” concludes Paul.