Keeping business in the family isn't always easy
We often hear it said that family businesses are the backbone of the Northern Ireland economy - and the figures would seem to confirm that is true.
Almost 75% of companies in Northern Ireland are classed as being family-run, and a report by PwC earlier this year suggested family businesses collectively employ more than 50,000 people in the region.
However, that same report noted that only a fraction of those businesses will, for whatever reason, survive and stay in the family beyond a couple of generations - whether because of the retirement of the founder, internal conflicts, a reluctance to bring in external expertise or other reasons.
BGF (Business Growth Fund) has a lot of experience of working with successful small and medium sized businesses across Britain and Northern Ireland, and while every business is different, there are a few common traits across the successful family-owned and run companies we've worked with which help them to thrive. In the first instance, structure is really important.
It sounds simple but when a family business grows quickly and organically, this can be lost. With clear reporting lines in place, internal conflicts between staff (whether family or non-family) are more easily avoided. Structure is also key when it comes to succession.
Family businesses tend to be founded by one or two members of the same generation but if junior family members are in the business and have ambitions to take the business forward in the future, they need to have clarity on their own personal progression and also the longer term succession plans when the current leaders retire.
Like any business, successful family companies can often require outside expertise to be brought in - for example, via new senior staff, advisers, or third party investors.
This can understandably be a very emotive decision for any business owner and particularly family run businesses, which can often be a barrier to getting the right input in order to maximise growth opportunities.
As minority investors, BGF makes it a priority to spend plenty of time getting to know the family that owns the business we're investing in and to allow them to get to know us.
We have learned how important it is to understand and respect the family dynamic because it is unlikely that dynamic will change dramatically following our investment - and nor should it.
We also work hard to understand what the family want to achieve with the business and on a personal level as that allows us to structure an investment that meets these goals.
In my view, building trust and a strong relationship is absolutely key. In many cases the businesses we invest in have been through numerous family generations and it can be a massive a decision to introduce third party investors.
We have found that the more time we spend building trust, the stronger and more open and collaborative the relationship becomes.
Of course, in most cases the family knows the business, its markets and its customers inside out.
Therefore, when it comes to bringing in external expertise, we add value by introducing non-exec directors, and chairmen, who bring their own direct experience and another perspective.
Again relationships are key so time must be spent up front to get the right individual. What operational expertise a family business needs can depend on their long terms plans. If the family want to continue the business for the long-term and there is natural succession then there may be no need to introduce additional senior management.
However, if there isn't natural succession and the family member wants to step back, then we will help them to find appropriate skill sets to bring in.
There are no golden rules. But with transparency, structure and a serious investment in relationships I believe that even more of Northern Ireland's family-owned businesses can be successful for the long-term.