Spotting the opportunity in succession planning
Business and acquisition specialist, Jonathan Jay, discusses family business succession and the lessons that can be learned from real-life stories and the smash-hit TV series.
It’s quite an emotive issue, succession – as the TV series has shown us. When a business has been built from the ground up, and several years have been spent growing it, handing over the reins to another person or team is difficult – even if it’s family.
This is a common issue in UK business, much of which is family-orientated. According to research by Oxford Economics commissioned by the IFB Research Foundation on the UK family business sector in 2020–2021, 86% of UK businesses are family-owned, employing over 14 million people, contributing £637bn to UK GDP.
Yet only 35% of organisations have a formalised succession planning process for critical roles – nearly half (46%) of board members admit to having no effective plan process for CEO succession. How many of those family businesses have clear succession plans?
It surprises me that business leaders can be in denial when it comes to such planning. The key is to keep emotions out of it. It can be done, as demonstrated recently with a sale I advised on – a family business without a successor.
A legacy preserved
Viners & Sons is a well-respected funeral organisation in West Malling that has been in operation since 1777, handed down through the family for generations. The last owner, Keith, did not have an immediate successor and was approaching retirement age. A tricky situation, except that there was a brilliant successor waiting in the wings. James Gardner had first worked for the business years ago, washing the cars at the age of 14. Now in his early forties, he had worked in the City and was thinking of approaching Keith.
James and I worked closely to prepare the correct approach – succession is a personal thing and this business had such a huge legacy, it was important that we got it right. I’m delighted to say that things could not have gone better – Keith sold the business to James, who has respected the family name by growing the business organically. First, he opened Viners on the Hill, providing a second, more informal outlet for customers to discuss and plan funerals and here, he also sells commemorative art and gifts – a clever addition to the business. I’ve also worked with James on a second acquisition – Hogben & Partners Ltd in Faversham. The event and limousine car hire element of the business ties in with the existing offering from Viners, expanding and consolidating its services further for the convenience of its customers.
And this is the plan that was first pitched to Keith. A promise to honour his family legacy, growing the business strategically and sensitively. James is keeping the company part of the community while using a more objective eye to spot opportunities.
Succession plans are vital. But when not clearly set out, they threaten the security and legacy of a business. Having a relative is not a guarantee and some businesses, like Viners, don’t have an obvious successor. This is an opportunity for potential acquisition. If pitched and then carried out correctly, it can be the start of something great.