The first in a series of five short films from family firm Gordon & Macphail who are celebrating 125 years as a family business. This first film demonstrates the pride, heritage and the community of Elgin where they are based and celebrates the real value of values and the long term view that has helped them stay the test of time.

LoveRaw® is the innovative vegan chocolate brand which makes ‘chocolate chocolate’ – not only for vegans, but for unvegan vegans (Someone who chooses to eat less meat and opts for either vegetarian or vegan meals) too. Rimi and Manav Thapar, husband and wife team and founders of LoveRaw®, are on a mission to continue making legendary vegan chocolate that tastes great whilst maintaining their honest, transparent and no artificial nonsense roots. They want to remove the negative stigma associated with vegan chocolate and prove that it can be decadently indulgent and delicious. Rimi Thapar already had a great career within investment banking but decided to leave this behind her and, following a series of life events, launched LoveRaw® in 2013. In 2010, Rimi made the decision to leave her job and move to Spain where her husband was based. Manav Thapar had his own business in distribution and was also selling property to international investors in Spain. Rimi spent the next two years travelling between Spain and the UK as her father was sick. During this time, she regularly felt tired and had no energy, so started to question if there really was a correlation between eating well and feeling good, she discovered “HELL YES!” After moving to Spain, she discovered farmers markets, and was eating a diet richer in fresh and unprocessed foods. Rimi was feeling re-energised but she encountered issues when continuing with this new lifestyle. Rimi became frustrated that a lot of food companies were promoting themselves as ‘healthy & nutritious’ but on closer inspection found that this wasn’t the case. This spurred her on to make her own products so that she knew exactly what was going into them and that consumers weren’t being misled, knowing exactly what they were buying in to. “The name LoveRaw® represents being natural, stripped back, transparent and honest,” says Rimi. Rimi launched LoveRaw® in 2013 from her in-law’s home kitchen in Manchester with a start-up budget of only £600. Hustling her way into Wholefoods, she received and over promised her first order of 5000 units of organic snack bars. She had help from family and friends to make this order happen whilst working crazy 20-hour days to get up and running. Rimi presented her new confectionary product range in the Dragons Den in 2017 and it was on this premise an offer was made by Deborah Meaden to the tune of £50K. Unable to agree percentages on the business, Rimi walked away from the Dragons and since launched the new category mentioned on the show. The Vegan Buttercup category performed phenomenally well and based on this success, Rimi has extended this category and gone on to introduce new products to the LoveRaw range, including chocolate bars made with their own vegan ‘milk’ chocolate. Despite the financial devastation the pandemic has caused for businesses across the globe, 2020 has been an outstanding year for this dynamic duo and their brand. Here is what they have achieved in brief: They won a fantastic investment form Blue Horizon Ventures (late 2019) They launched their very own vegan M:lk® Choc Bars (beating Cadbury to it) They launched their world first vegan Cre&m Wafer Bars They won two regional Great British Entrepreneur Awards 2020, North West Entrepreneurs of the Year and Family Business Entrepreneurs of the Year They won at the World Plant Based Awards 2020 for the Best Dairy Product Alternative for their M:lk® Choc Bars As the business evolved, so have Manav and Rimi’s family and they now have two small children. Working around the clock in a fast-growing, dynamic business hasn’t hindered Rimi, who regularly takes her children to work and has been known to take them along to investor meetings and work trips to Germany. In fact, since becoming a super mum, Rimi is even more passionate about what she does and making LoveRaw® the go-to vegan choice for delicious chocolate treats. It has obviously been a challenge to juggle being a mum with running a business and Rimi maintains that it is pretty much impossible to achieve a work-life balance. But she and Manav don’t just want to sacrifice the business that they have worked so hard to build and so they have found a way to include their children and their routine as part of her working day; tears, tantrums, nappies and all!

“What’s wrong — is the company going bankrupt? Are we being sold?” For Charlie, who had joined his family’s bakery business two years after getting his MBA and earning his stripes at another company, this question from the plant manager came out of the blue. He was eager to earn his colleagues’ respect, rather than relying on his family name to provide it. So he went to great lengths to be just “one of the gang” in every possible way. This included parking in the back of the building and walking through the production plant, rather than zipping into the reserved space he’d been provided near the executive offices in the front. Most days he would stop and chat on his walk through the factory, getting to know his colleagues and learning more about the operations. But one day, after his morning walkthrough, the plant manager surprised him with the question about the company’s future. Charlie reassured him that the company was actually having a banner year. Where had that worry come from? It turns out, seven people had gone to the plant manager after seeing Charlie arrive that morning with a sour look on his face. They all wanted to know: Was something bad about to happen? The scowl had nothing to do with work, but until then it had not dawned on Charlie how closely people were watching him. Though his previous job and his MBA had been invaluable, neither had fully prepared him for the reality of managing under a microscope. When your family’s name is on the door, you will never just be one of the gang — and everything you do could be fodder for the office rumour mill. From that day on Charlie, who eventually rose to become the fourth-generation CEO of his family’s company, made a promise to himself that each morning when he walked from his car to his office, it would be with his head held high and a smile on his face, no matter what was on his mind. The family business leaders we work with have echoed Charlie’s experience. They have learned that their actions — positive and negative — are amplified because of their status as owners (or owners-to-be) of the company. Even seemingly small gestures — driving a fancy car to the office, putting photos of themselves with celebrities on Facebook, or calling themselves an “owner” in front of colleagues — can unintentionally generate ill will. But that doesn’t have to be the case. Here are some of the most common traps we’ve seen family business members fall into, and how to avoid them. Working at the company for the wrong reasons. If family members act as if they are there only to collect a paycheck, or because they have nowhere else to go, it sends a signal that all employees should push to get as much for themselves as they can. It’s better to convey that you are interested in the business. If you are passionate about the business and demonstrate your commitment through positive energy and hard work, it can energize other employees and encourage them to focus more on the common cause and less on who gets what. Expecting promotions without putting in the work. When family members start at a level that is beyond their qualifications, or are promoted much faster than deserved, other employees are more likely to focus on patronage rather than performance as they look to climb the ladder. If you’re joining the family business, start at the bottom of the pyramid and work your way to the top. This will reinforce that the company is truly a meritocracy. Working around the chain of command to get special treatment. How do you seek approval for their ideas? Do you follow the rules and work as hard as everyone else? Too often, family members take advantage of their access to senior members of the firm, seeing the rules as malleable and looking for ways around them. Instead, work through the chain of command, don’t ask for special treatment by relatives in senior positions, and abide by policies for vacation days, expenses, and office hours. This will foster a culture of accountability and reinforce the integrity of the company’s decision-making processes. Blurring the boundaries between home and work environments. Office politics in family businesses are further complicated when members bring their family dynamics into the business, opening up the possibility of employees playing family members against each other. It’s important to set clear boundaries within the workplace, such as referring to people by name rather than relationship (“Mary” rather than “Mom”) and not discussing family dramatics at the office. This helps set a professional tone. Working in your family’s business can bring enormous reward, but it also carries a lot of responsibility. As Charlie learned, if you work harder than other employees, are willing to learn from the shop floor up, and treat your privilege with modesty, you’re more likely to earn the respect of your colleagues and keep office politics in check. First Published on 6 November, 2017 in the Harvard Business Review Reproduced with permission of the author.

Owning and operating a family business is a big part of the American dream. The U.S. Census Bureau reports that 90% of all North American business enterprises are family-owned. But along with realizing that dream comes a bittersweet reality for some family business owners – knowing when it’s time to sell. And that can be a challenge as they wrestle with deep emotional ties to the business and various selling options, says Terry Monroe, founder and president of American Business Brokers & Advisors (ABBA) and author of Hidden Wealth: The Secret to Getting Top Dollar for Your Business. “One of the most challenging parts of owning and operating a family business is succession planning,” Monroe says. “While many family business owners may dream of passing ownership of the business onto future generations, keeping the business within the family isn’t always a viable option.” “There are many other reasons owners come to the often hard, sometimes easy decision to sell – burnout, profitability, dramatic changes in their industry, a favourable tax climate, etc. But with the economy rapidly changing, it’s a reckoning for some, a fork in the road, and you need to read the signs.” Monroe gives five signs that it’s time to sell the family business: Your children are not interested in the business. “If you put your kids through college thanks mainly to a profitable small business, chances are they have their sights set on bigger goals when they graduate,” Monroe says. “This realization can be painful to a parent. There is nothing wrong with laying out the facts regarding the opportunity that the family business presents to them, but forcing the company on your children will only result in resentment or poor performance, or both.” Your children are not capable. Not everyone has what it takes to run a business, Monroe says, and when unqualified children are allowed to take over, the results can be disastrous. “This is where the saying ‘Thunder, Blunder, Under’ came from,” Monroe says. “It means the first generation made the business successful, the second generation floundered and somehow kept the business together, and the third generation let the business go under.” Ownership has become too diluted. “Unless the company is always growing, it is hard to support a growing number of owners,” Monroe says. “This is true whether they work in the business or not, because the company can’t keep paying salaries or dividends or bonuses to those not in the business or individuals who are not working full-time there. And having too many owners often disrupts the managing of the company.” You receive an offer you can’t refuse. This is rare, Monroe says, but when it happens you should know it is a great offer and take it. “Markets go up and markets go down,” he says. “Regardless what kind of business you are in, you should always know what the market value of your business is in your industry.” Members of the next generation don’t like working together. Perhaps all of your children are capable, but they can’t seem to get along. “If they are not getting along now,” Monroe says, “it will only be worse once they are in business together. Turning the business over to them will impact your retirement plans, affect their lives, and possibly destroy the relationships they have with each other.” “Sometimes the difficult but smart decision is to sell the family business,” Monroe says. “It’s important to give yourself enough time to adequately plan, and you may want to consult with some specialists to ensure that you have as much information as possible prior to making a decision.”

Like most great stories, the Royal Cup Coffee story has a humble beginning. In 1896, Henry T. Batterton made rounds in Birmingham, Alabama, selling coffee from his horse-drawn wagon. His company, Batterton Coffee Company, served coffee so fresh and flavourful that it was deemed fit for royalty. Because of its high-quality taste, it became known around town as a “royal” cup of coffee. Batterton Coffee Company experienced decades of success and growth, and established itself as a legitimate, thriving business in a small southern city. It wasn’t until 1950, after William E. Smith purchased Batterton Coffee Company, that the company was renamed Royal Cup Coffee. To this day, the Smith family still owns and manages the business. Over the past 100 years, Royal Cup Coffee and Tea has grown from its small, hometown roots to become a major importer, roaster and distributor of the world’s finest specialty and premium coffees and teas. Royal Cup’s reach extends throughout the U.S., Mexico and the Caribbean, serving customers in the food service, hospitality, office and specialty coffee markets. Their strong history is a big part of who we are today, but our company’s story still is being written. With appreciation and reverence, they acknowledge the past; with excitement and optimism, they work towards the future. Check out their video story and gain an insight into another great family business too.

For those involved in the management of the family firm beware that staying true to your roots can foster inertia when innovation is most necessary. Recent research has punctured the stereotype that family firms are staid and lacking in innovation. In fact, their cultural differences can be the source of a decided innovation advantage. But those same strong values can make it harder for family firms to find a new business model when the old one suddenly becomes a roadblock to success. Loyalty to the firm is a distinguishing family asset as this intrinsic quality gives owner-managers a competitive advantage in the long-term development of the business. But when it comes to business models, loyalty for the sake of loyalty can become a liability. Too much loyalty can limit success, since it can inhibit founders of family firms from adopting innovative business models until it is too late. The Ultimate Decline Of Laura Ashley A good case in point is the textile firm founded by Laura Ashley in 1953. Born in Wales in 1925, Ashley learned how to make clothes as a child from her quilt-making grandmother. As an adult, she made headscarves, napkins, table mats and tea towels that were adored by her friends and family. Her designs recalled her grandmother’s old-fashioned quality of life, where British women tended to the home and garden in serenity. It was an ephemeral lifestyle wedded to a country-of-origin effect. Ashley realised she had invented a business model that powered her exceptional rise to success. Ashley married an enterprising fellow who gave up his job in London to supervise the production of textile products printed with his wife’s designs. They moved the operations from their tiny flat in London to a large factory in Wales, employing staff at wages well above the average local salaries. The Laura Ashley brand quickly acquired a solid reputation as a premium fashion player, labelling all products “Made in Wales.” The business took off, providing employment opportunities to the couple’s four children. From a fierce loyalty to her Welsh roots sprang a business empire that enabled Ashley and her family to run a global network of 500 shops and employ 1,000 people by 1975. But in 1985, tragedy befell the family and the firm when Ashley died unexpectedly at the age of 60. It was a period when many of the firm’s rivals were beginning to outsource their production to countries on the periphery of Europe, developing major supply chain networks in Morocco and Turkey. At the same time, the exotic but far less costly garments being sold by its rivals opened up a completely new competitive environment for the Welsh firm. Some pundits even claimed that the “Laura Ashley look” was too British and was outdated. Women in the 1980s needed more assertive clothing in line with their growing status in the workplace. Following the death of Ashley, her husband and their children struggled to find a response to the changes in the marketplace. The core of their business model, however, was left untouched. In honour of their founder, they announced to their staff that both the manufacturing and logistics operations would stay in Wales. Yet within five years, the company was in deep financial trouble and an outsider CEO was hired in 1991, followed by a string of other CEOs. The family lost control of the firm after an Asian company became the major shareholder in 1998. The company is now nothing more than a licensing entity. This sad ending to a dream-come-true journey reflects the hardships any family business could face when internal and external roadblocks suddenly appear at the same time. To avoid such a fate may not be as difficult as most observers believe, however, if owner-managers institutionalise innovation in the core of their business model. Business Model Innovation At Zara Take the example of Zara, a fashion company founded in La Coruña in northern Spain, by Amancio Ortega and his wife in 1975. After 10 years of selling inexpensive garments throughout Spain, Ortega decided to institutionalise innovation in the firm’s business model. He believed he could beat the well-known brands like Laura Ashley at their own game by reducing lead times and quickly responding to trends. While remaining loyal to the employees who worked at his original factory, Ortega was careful not to make future investments for the sole benefit of his compatriots. He decided to open plants in neighbouring Portugal, as well as in Turkey and Morocco. Ortega connected the factories with a state-of-the-art logistics network. The rest is history. A highly responsive supply chain now ships garments twice a week to Zara’s 2,100 stores located in 88 countries. Furthermore, the creative process of designing new garments based on changes in fashion trends has been sped up to the point whereby the new designs on Zara’s drawing boards reach the stores as fully finished garments within two weeks. By not being too loyal to his operational geography while at the same time institutionalising innovation throughout the supply chain, Ortega transformed Zara from a fashion discounter into the world’s largest apparel maker, managing up to 20 clothing collections per year. In contrast to Ashley who was bound to her operations in Wales, Ortega decided to transform the existing design, manufacturing and distribution processes entirely. He demonstrated the value of breaking old habits and created an entirely new business model based on continuous improvement. This article was first published on the INSEAD website here and has been reproduced with their permission.

Arbikie Estate is a family-owned working farm perched on the east coast of Angus. Here, the crop is king and they painstakingly plant, sow, tend and harvest the fields that make up Arbikie. This is a family business where they are craftsmen of the soil and an estate profoundly shaped by its environment: the red sandstone-tinted soil, the powerful sea and the turbulent weather give Arbike a character found nowhere else. And here, situated where land meets sea, sits the distillery – created from an ancient barn, it is a place with all the ingredients required to produce authentic spirits of the highest quality. The family has been farming at Arbikie for four generations. From father to son, they have gained an intuitive understanding of the land, sowing and harvesting the crops that now create Arbikie’s range of field to bottle spirits. Farming in the Stirling family goes back even further – since 1660, initially on the west coast. Their lands passed through seven generations until great uncle Bill moved to farm at Arbikie on the east coast of Angus in the 1920’s. He then passed it to the grandfather of the current owners, John Stirling who expanded the acreage before passing the lands over to Alec Stirling. Brothers John, Iain and David are the visionaries and driving force behind the Arbikie Distillery. As with all farming families, the brothers grew up working around the farm, and It is this hands-on experience that gave them a deep understanding and respect of the land. Despite pursuing careers away from farming, they have always stayed attached to the family lands – and now with the opening and growth of the Arbikie Highland Estate distillery, they have returned to drive this exciting and continually evolving venture. Join Paul Andrews as he interviews one of the Arbikie directors, Iain Stirling, in understanding more about the values, purposes and drivers behind the business, and their role as custodians of the family firm for future generations.

Chase are a family owned, British field to bottle distillery, creating luxury spirits from their farm in Herefordshire. They set up the business in 2008 to challenge the status quo in the white spirits industry. If people are interested in the terroir for their wine or the barrel ageing for their whisky, then why shouldn’t they be interested in how their white spirits have been crafted? The business has become a family affair; with Will’s older sons Harry and James working within the business. Harry manages Chase Farm and farms 300 acres of potatoes which are grown on a 5-year crop rotation and James works as their Global Brand Ambassador educating customers and consumers about their field to bottle philosophy. This short film clearly shows the family business brand and values beautifully. Find out more at www.chasedistillery.co.uk

Have you tried to raise the subject of succession planning with your parents? How have they reacted? I am assuming from the fact you are reading this that it may not have had the result that you wanted. In this article, Russ Haworth provides food for thought and some ideas as to how to bring up the conversation around succession and getting Mum and Dad to talk about it. It may be that you have been met with some resistance to the idea, there are more important things to be worrying about than that. Is it the proverbial tin can that keeps getting kicked down the road? If so, read on. If you are one of the family businesses that have a well thought out and living succession plan in place, that’s awesome. If you would like to leave your own thoughts on how you have achieved that, I am sure those without would benefit from your experience. There are a number of ways in which you can try and get Mum and Dad to the table and different approaches will work for different people. As with anything related to family business, there is no best practice, no ‘off the shelf’ solution or silver bullet for this. However, I have summarised below some of my thoughts on what I have observed with the families that I have worked with and helped through the facilitation these discussions. Do You Know How Your Parents Feel? If you are someone who is looking to take on a leadership, management or ownership role in your family business, the prospect might be scary and exciting in equal measure, it may symbolise to you a progression that you have dreamed about for a long time. But do you know how your parents feel about it? Succession in a family business can evoke differing emotions depending on which generation you are in. If you are the rising generation, looking to take on a more senior management role, or stepping into a leadership role or taking on the ownership of the business you are likely to feel very different to those in the senior generation. For them it can be like asking them to give up a limb, their role in the business is part of who they are as a person, part of their identity. The leadership role they have helps them to feel accomplished and able to fulfil their purpose. The ownership is reward for their years of blood, sweat and tears in something that may even have been around longer than you have. So, whilst you may feel impatient, excited and eager to start these discussions, I would suggest the first step would be to try and understand what they are feeling about it. This is not easy, it is a discussion that invites us to talk about our fears, our emotions and it can be uncomfortable to do so. That often makes it easy to avoid, but each day that passes is another day closer to when the issue may be forced upon you by circumstance rather than choice and that in itself can lead to challenges. It may be easier for your parents to talk to someone who is not linked to the business, either someone who is trained and able to explore these issues with them, or someone they know who may have been through something similar. Understand What Might Be HEARD When You Say Succession In addition, be clear about what it is you are wanting to talk about. When you mention succession, is it clear what it is that you are trying to discuss? After all, it is a word that has a pretty broad definition. Dictionary.com defines it as: The coming of one person or thing after another in order, sequence, or in the course of events, or the right, act, or process, by which one person succeeds to the office, rank, estate, or the like, of another or the descent or transmission of a throne, dignity, estate, or the like. If you are talking about succession in terms of you taking on a management or leadership role (i.e. rank), is that clear or could your parents be hearing it as the succession to their estate? If they are hearing in that context, they may well be seeing that as you telling them that they are ready for the knackers yard, which may be a source of resistance. The phrase itself presents the idea of one thing ending and another beginning. All of the elements of succession will need to be dealt with, but some may be easier to tackle than others. For example, your parents may feel more comfortable discussing you moving into a leadership role, than you taking over the ownership of the business. If this is the case, start there. This may be the catalyst that leads to other discussions, remember this isn’t something that has to be done in one sitting. Succession Planning is a process, not an event. Presenting it a a process rather than an event may also help as very often it is perceived as an event. Let’s take the example of a change in ownership, to ‘complete’ a change in ownership there may need to be formal legal documents that need to be signed and invariably the signing of these documents can feel very much like an event. If this is how succession planning is seen, it can seem final and there will be a lack of motivation. If we look at a changing of roles in the business, there may be a specific date in mind for when you take over the Managing Director role from Mum or Dad, again this can feel like an event. Each of these events, however, are ideally the result of a carefully and sensitively managed process, that has explored all of the hopes, dreams, fears and concerns of all those involved. Starting the discussions around this is not the same as the event that makes any changes formal, but it can feel like that. Appreciating their views and showing empathy for how they may be feeling about it is a great way to encourage this as a collaborative process, rather than them feeling forced out of something they love and get great joy from (despite the tough days!). Emotion Trumps Logic Let’s face it, we all know that dealing with succession is going to happen at some point, be that through planning or in the event of the incumbent owner passing away or suffering an illness without a plan. Your parents know that too. I think most of us would agree that dealing with it via a planning process with the active participation of all, towards a common goal, is probably better than waiting to see what their Will says (if indeed there is one). So Why Is It So Hard To Start The Planning Process? We are emotional creatures, and whilst logic may dictate that we should have these plans in place, our thoughts and feelings put barriers and excuses in the way. This is also why many people don’t have a valid Will in place. They think that this means they are going to die. The two are not linked, however, dying with a Will in place is usually far better than dying without one. The planning process should bring peace of mind, if carried out well it will address all of the concerns of all those involved and so could be re-framed as a positive rather than a negative emotional experience. That is not to say that it is all sunshine and flowers, there will be difficult discussions, there may be some bumps in the road but with the right facilitation and attitude from all it can be far more rewarding than perhaps it is perceived. The Impact Of COVID-19 We cannot ignore the fact that we are living through a global pandemic at the moment. We are being faced with our own mortality and a hugely uncertain economic environment. Understand they might be scared, it may be really hard for them to admit that they are scared, but it doesn’t mean they aren’t. They may be scared about giving up control of something that has been a part of their lives for a very long time, especially at a difficult time. They may be scared for the future of the business and that passing that responsibility to you at the moment is not setting you up for success. They may simply be scared that you are not the right person or that there is never going to be the right person to take on their roles in the business. They may be scared about losing their identity. Imagine the feeling of going from Janet or John, Managing Director of XYZ Limited to ’just’ Janet or John. This can feel like a loss, and with any loss there is the need to go through a process of accepting that loss. Some are better than others at it, but acknowledging it is the first step in helping to overcome it. As well as a loss of identity in the business, it may also feel like a loss of identity in the family itself. If the process of succession planning is focused solely on the technical issues of ownership and control, there is a real danger that emotional aspects are being ‘buried’ and not discussed. I have seen the consequences of this. There are families who have spent a lot of time and money creating a legal or financial structure that looks great on paper, but when it comes to signing it, they have not been able to because it ‘doesn’t feel right’. Ignoring the elephant in the room does not mean that there isn’t an elephant in the room! Taking the analogy a step further, if there are issues around trust, loss of identity, loss of a sense of purpose and other emotional aspects to overcome, it can seem like a pretty big elephant. This may be the case, but the best way to eat an elephant (metaphorically of course!) is one bite at a time. Right, enough about elephants! The point here is that technical solutions are often needed to facilitate a succession plan, and these are based on logic, not emotion. It is often the emotional aspects of succession that need to be addressed before, or at least alongside, coming up with the technical solution. Is There Ever A ‘Right’ Time? I often hear that it just isn’t the right time to start succession planning and so it is something that is put aside until there is a right time. There is a Chinese proverb that states; “The best time to plant a tree was 20 years ago, the next best time is now” and for me, this rings true for the discussions around succession planning. That said you may well be met with the response “Is this really the right time?” What may be happening is that there are other underlying reasons as to why the discussions aren’t happening, but it is easier to say “now is not the time” rather than voice the real concern. It may be that there isn’t a sufficient level of trust that you are the right person to take the business on? Do you have the right skills? Do you have ideas that they are resistant to? Do you want to diversify the business and they want to maintain the status quo? What if you are more successful than them? It is likely that you will need to have honest and open discussions about these difficult scenarios. That may feel like volunteering to stub your toe! Why would you want to have those difficult discussions? Why would you want to hear or tell someone that you don’t feel that they are the right person for the job? It may be that you or whoever the successor is does not possess the right skills etc. but understanding that and being honest about that is the first step in overcoming that barrier. There are courses you can go on, qualifications you can get, mentors you can find to help overcome all of these, but understanding the issue exists is the first stage in addressing it. Preparing For Life Outside Of The Family Business People are living longer and more vibrant lives and so the concept of retirement can be really unattractive. Who wants to give up an active role in a thriving business with lots of interaction with people on a day to day basis to go and sit around doing nothing all day? Re-framing retirement as simply the next phase in their life can again help to start the discussions. Retirement can be a vibrant time, an active time where they can achieve the balance between their passions of work, the business and other interests as part of the process of handing over the responsibility There are lots of programmes, courses and literature available to help the next generation to prepare for life within the family business, but there is not so much available to those senior generation who are preparing for life outside the family business. Are they financially independent of the business? Do they know what this looks like? Have they spoken to somebody about this? Again, the financial dependency on the business can often be an excuse rather than a reason and there are ways to explore this to ensure that your parents feel financially able to reduce their dependency on the business. Emotional independence is harder and takes time but given that this is a process, that’s OK. One exercise that your parents could look at it to list out all of the positive emotions and feelings they have that are as a direct result of their role within the business. What emotional well-being does the business provide them with? By understanding this, you can explore how those positive emotions could be maintained outside of the business. Are there ways in which their purpose and identity can be maintained or even enhanced beyond their current role? Exploring their purpose and meaning beyond the business can be really exciting for them and open up opportunities that they may not have considered before, such as becoming a mentor to young entrepreneurs through a mentoring programme or college/university. Are there non-executive directorships that they could take on to help other businesses? Do they want to embark on a project to write or record the history of the family business? This could be an incredibly inspiring piece of work that can be cherished by generations to come. Succession Is A Process, Not An Event I have mentioned a few times that succession is a process and not an event. This however, is based on an assumption that some planning is done. It becomes an event as and when people either pass away or suffer a debilitating illness and at that point the process is typically driven by the legal system. This can lead to increased levels of stress and conflict in the family at a time when there is likely to be a lot of emotion around any way. So perhaps it could be reworded as, succession should be a process not an event but that is dependent on all those involved! None of us are immortal, none of us are immune to emotion and not all of us find it easy to talk about how we are feeling. There is help available though. Using a facilitator who is working for the family as a whole, rather than for an individual or for the business entity, can be hugely valuable in these circumstances. They will be used to having these discussions, used to hearing the fears and concerns and will be empathetic towards those feeling them. They are able to give everyone in the process a voice and create an environment that helps people feel heard and to explore their options. This will typically lead to far more meaningful discussions when it comes to the financial and technical matters that will need to be put in place to deliver a succession plan.

At Riboli Family Wines, they pride themselves in maintaining their core family values while also employing innovative techniques that will keep their legacy alive for generations to come. Each Riboli family member maintains a steadfast commitment to honouring not only the premiere craftsmanship of wines, but also their dedication to environmental sustainability and to the people that make up their family business. This is a story of a family legacy built on hard work, family values and a love for the land. An American Winery of the Year Winner, check out this short film that explains all there is to know about the family behind this award winning family business.

There is no ‘one size fits all’ approach when it comes to protecting family wealth, passing this to future generations in an appropriate way, and at the ‘right time’. Setting up a Family Investment Company (“FIC”) is increasingly a popular choice for successful family business owners as part of their broader succession and tax planning strategy. Planning with trusts has a significant role in protecting family wealth for future generations, however with limitations placed on the value which can be settled into trust this typically forms only part of a plan in which FIC’s increasingly feature. A FIC is a limited company like any other, but one which has been set up to manage and hold investments for the medium-to-long term benefit of future generations. They are typically funded by the founder transferring cash or assets by way of a loan, which are then invested by the FIC. On creation, family members and often family trusts are brought in as shareholders. The investments are usually equity portfolios or property. The founder shareholder generally maintains control over the investments and the payment of dividends, and invites other family members onto the board as appropriate. The Articles and Shareholders Agreement are drafted to protect the shares from sale outside of the family, making this type of structure more effective in a divorce or dispute. Profits and gains of a FIC are charged at corporation tax rates which are significantly lower than the equivalent income and capital gains rates charged on individuals . In addition, dividends received by the FIC may suffer no UK tax at all. The FIC is therefore very tax efficient where profits are being reinvested and the return on the investment can be significantly increased as compared to personal ownership. Rental profits also enjoy preferential treatment since companies can fully deduct loan interest against profits whereas this is now restricted for individuals liable to income tax at higher rates. The FIC shelters the investments from income tax until the company pays dividends and the savings can therefore be considerable. One of the main advantages of FIC’s are the Inheritance Tax (“IHT”) benefits. Once the FIC is set up, the increase in value is not part of the founder’s taxable estate. The initial capital can also be given away which (if survived by 7 years) reduces the founder’s exposure to IHT. As with any tax planning there are risks as tax rates and rules change. HMRC are also known to be reviewing IHT generally, potentially looking to impose lifetime tax charges on all gifts, which could include those within a FIC. Anyone considering this form of planning should therefore do so soon. The FIC structure is appropriate where the capital and income can be retained within the company for long periods, or indeed used as a structure to pass on to the next generation in the same way one would use a trust. What matters is establishing whether a FIC is appropriate for you and that it has been considered as part of your broader family wealth planning. About the Author - Lyn is a Corporate Finance Partner and Managing Partner of AAB’s Edinburgh Office and is the head of their Family Business team. Lyn has played a key role in the successful growth of AAB in the central belt thanks to her extensive experience in advising on acquisitions, disposals (including MBOs, MBIs), debt and equity fundraising, financial due diligence and valuations. She advises clients in a wide variety of sectors, including food and drink, technology, engineering, support services, professional services and IT.

Kingsbarns Distillery are proud to be a family-owned and operated company, which is one of their four brand pillars that are key to how they work. From place to process, people to passion, their pillars are the key elements that make Kingsbarns’ unique spirit. Every bottle of Kingsbarns single malt whisky begins with locally grown, Fife barley. Coming into the harvest season, they took the time to visit Bill Whiteford, one of the farmers that grows barley to be used in their whiskies, and capture this process of harvesting barley that will later go into their Kingsbarns whiskies. Using locally grown barley anchors their spirit to their place and they are proud to work closely with local farmers. Check out the story with Bill Whiteford, another multi-generational family farm in this fantastic film.