Planning for the future is the biggest challenge facing Lancashire’s family-owned businesses, an expert has said.
Ian Riggs, a partner at law firm Hill Dickinson, said succession planning was a major barrier for firms looking to grow beyond the lifetime of their existing management.
He said a particular problem for family firms was whether to allow a non-family member to take up a leading role in the business.
It is estimate family firms generate a quarter of the country’s wealth with revenues of £1.1 trillion every year and supporting two in five private sector jobs.
Mr Riggs said: “There are examples where it is clear a family members does not have the skills or the desire to take on a leading role in a family business.
“We have also seen examples where the current management does not want their children to take over the business because they fear they will damage it.
“The trick is finding the right person for the job, whether that is a family member or not, and ensuring they fit into the ethos of the business.”
He said an increasingly popular way to get around the problem was to draw up “family constitutions” which any non-family members joining the hierarchy of a business would be expected to adhere to.
The constitutions operate in a similar manner to articles of association which all businesses have in place.
Mr Riggs said: “That lays the ground rules for any newcomer to a business and can ensure it is run in the manner the family wishes even after its members have left the management.”