Buisness practice | PPC92 September 2018

Pest management companies are often run by families, with trade secrets and family values being carried down through the ages. We asked Rebecca Pozzitaubert of the Institute for Family Business (IFB) to give PPC readers their five top tips for keeping it in the family.

There are many reasons why pest controllers decide to keep their business in the family generation after generation. Building a successful pest management company with your nearest and dearest, and then having the opportunity to pass it on to your children is very rewarding. The fact that family business is the most common model of business in the world is revealing of the many benefits that come with owning a family company.

There are 4.8 million family firms in the UK, which is almost 90% of all businesses, and they span from sibling start-ups to multi-generational brands, with some being hundreds of years old. For instance, the oldest family business in the UK is Bridport-based butcher shop RJ Balson & Sons, which marked its 500th anniversary in 2015.

It isn’t easy - owning, and managing, a family business brings a unique set of challenges. However, if they are addressed and managed, you can use these unique features to help shape your firm’s path to long-lasting success.

Succession planning

Succession planning isn’t a one-off event. It’s a process which can take a long time. By starting planning for your succession early, you can help avoid possible conflict amongst shareholders, as well as managing risks for the business later on.

It isn’t always easy to think and discuss what will happen after you retire, but nonetheless it is very important to plan for what you and your family want your pest control company to look like tomorrow.

One crucial aspect of succession is distinguishing between ownership and management. Retiring from the day-to-day running of the business doesn’t mean you are not an owner anymore, nor does it mean that you cannot continue to be involved in the business in some way. While the input of retired family members can be very helpful, it is also key that the next generation is given the space to lead in their own way.

Engaging the next generation

If you own a family business asking yourself when, and how, to start talking to your kids about the business and getting them involved is only natural. The good thing is that it is never too early for younger family members to start learning about the family firm (although don’t go handing them rodenticides just yet).

You might simply start having a chat about the company and why you love it or establish more formal engagement programmes. Most of the time you’ll find that the next generation is genuinely interested and cares for the family business, its sense of purpose and its achievements.

Giving the next generation space to learn and develop at their own pace is an important part of engagement. We often recommend that younger family members gain experience outside the family business before joining so that they can get different perspectives and learn skills that will help them and the family firm when they do join. And even if in their twenties they decide not to work in the family business, they may change their mind later on.

Professor Claire Seaman on succession

Results from some research by the Goodison Group in Scotland in 2014 examined family businesses and identified that 73% of all Scottish family businesses want to keep the business within the family. In 2014, estimates indicated that 12% of family-owned SMEs in Scotland had successfully been passed onto a second generation and around 7% were able to progress to a third generation.

The figures here are interesting, but there is also substantial anecdotal evidence that succession is often troublesome. Intriguingly, many cultures have a proverb or saying that reflects this and while translations vary the ‘three generations’ rule does appear to be entrenched in family business mythology if not in fact.

The research picture is a little subtler. The potential for conflict at the first generation ‘point of exchange’  is well documented, and intra-family conflicts are a major contributor to family business failure.

From that point onwards, the extent to which longterm business survival is realistic and seems to depend partly on the internal structures and processes of both the family and the business. The establishment of clear procedures for hiring new staff (including the next generation of family members) or the development of a family council are factors that professionalise the family business without necessarily diluting family input.

Offering opportunities for the family business members to network with others in similar circumstances and sources of information about different approaches, family business associations offer something not easily replicated in other parts of the business support network.

Managing conflict

As hard as one might try to avoid conflict in the family business, it is not always possible. People are at the heart of family and business, and where there are people there will always be different opinions and emotions at play.

Some level of conflict, at one point or another, is inevitable. But there are some steps you can take to prevent unnecessary conflict and to manage it when it does occur.

Making sure that the roles, responsibilities and decision-making processes of your family business are well established and known is a good place to start.

This involves exploring questions like:

• Who joins the conversations? 
• How do we communicate among the family and within the business? 
• Who takes part in the decision-making process now and who will in the future? 

In turn, being able to address these questions requires good and open communication, and creating a space where everyone feels safe expressing their opinions.
And what to do when it is not possible to avoid conflict? The natural tendency of families is to avoid conflict altogether because they see it as a sign of failure. But it is important to give many views and disagreements a seat at the table. Not all conflict is unhealthy, on the contrary, it may lead to constructive conversations.

Good communication

People often ask us how they can improve communication in their family business. The first thing to keep in mind is that keeping everyone in the loop is very important. Whether it is within the family or across the business, people need to be informed on what is going on and why.

Talking is not the same as effective communication. Simply having a conversation is often not enough. Instead, you should establish regular meetings where relevant issues are discussed. This goes hand-in-hand with establishing guidelines for what needs to be discussed, where and when, and what is or isn’t appropriate for a business meeting. For communication to be effective, you need to create an environment where people feel safe when expressing their ideas, wishes and concerns without the fear of being judged.

Communication is also not just talking about business. It is important to create opportunities to have fun together and strengthen family bonds. This will only help you increase the levels of trust and feeling of belonging, which are at the heart of responsible family business ownership.

And finally, communicating and sharing experiences with other family businesses can be of huge help. While every family business is different, family business challenges are often the same. The opportunity to talk to families who have gone through similar challenges and explore well-travelled paths can help you learn from what others have done, their failures and their successes.

ABOUT IFB

Our mission is to help family businesses celebrate, leverage and sustain their unique contribution to the long-term prosperity of the UK. We are the voice of UK family firms, supporting families through events, connections, and the latest family business knowledge.

ifb.org.uk

020 7630 6250

Rebecca Pozzitaubert
Institute for Family Business (IFB)
September 2018 | PPC92

Source: PPC92