• Family Business Place

MEMBER ADVICE: Which type of family business are you?

Francesca Hampton is a long-time supporter of Family Business Place and champion for the family business sector. She is CFO of independently-owned, Cynergy Bank, who specialise in working with families in business.

I’ve been in banking for over 30 years but it wasn’t until I became CFO at Cynergy Bank, a Bank owned by private individuals who are very family orientated, that I truly appreciated the invaluable role family firms play in our economy. In fact there are 4.8 million of them out there, playing a pivotal part in the UK’s recovery from this terrible pandemic. Not just as businesses, but as intrinsic parts of local communities.

What’s more, the leaders of these firms, are some of the most extraordinary people I’ve met. Men and women resiliently marching on with building their livelihoods and empires, working against a backdrop of COVID.

When the Government first announced its financial support for companies, including the CBILS and Bounceback loans, we saw a clear divide between two different types of businesses and their leaders. Both were looking to borrow money but their approach to it was a tale of two halves.

On the one hand were the cautious, risk-averse owners who had calculated exactly how much they needed. They had produced detailed business plans and only wanted to access the bare minimum in order to see them through the pandemic. They approached multiple lenders and monitored and assessed the situation, tried to figure out every other way rather than borrowing money but had finally accepted they needed help.

More often than not these were family firms in their 3rd generation and beyond; businesses who had been around for generations and were very hesitant to do anything out of character. After all, they’ve been trading the same way for many years and had good, solid, stable businesses.

In complete contrast, other business owners we saw arrived quite quickly at our door after the support was announced. They have agile, entrepreneurial businesses and are more comfortable with taking risk, sometimes only one or two generations old. They didn’t know exactly how much they needed but they recognised the need to grow their businesses despite the pandemic and took the opportunity to borrow money on terms they wouldn’t normally be able to, and therefore accelerate their plans for growth.

The government support this sort of lending for companies who have a good, viable business pre-Covid and who had plans for expansion; to open new premises, invest in innovative machinery or even buy other firms. They were people who didn’t want to look back and think ‘we just stood still’. They accessed lending to invest and grow rather than just survive. Some clever and agile businesses have taken the opportunity to get ahead of the curve and flourish, as our culture changes and people begin to live, work and transact differently.

Whichever camp you fall into (not to mention that different generations within the same business will have different approaches) - now is the time to assess what is and isn’t working in your family business. Are you guilty of doing things the same old way, even though you’re not getting the results, for fear of upsetting the apple cart? Have you seized new opportunities and gone all in? Or are you still dabbling in what ‘might’ be a good idea but are scared to give it your everything?

Use this time well. If you don’t make a move someone else might. Don’t let your family business be left standing when others may be racing ahead.

Family firms have the right to be proud of their wonderful histories and traditions. But the best ones - the most successful ones - are writing their own story for the future right now.

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