Family Business
What is a Family Business?
A family business can be described as a business in which two or more family members are involved and most of the ownership or control lies within the said family. Farms are an early example of family business in which private life and work first intersected. In urban areas it is still normal for a shopkeeper to live in the same building in which he/she works with family members often helping if need arises.
Family businesses are recognized as an important and dynamic participant in global economy. Family businesses have some advantages over other business entities in that, their focus is on strategic goals rather than tactical ones, their commitment to quality (often associated with the family name), and their concern for employees. On the other hand, family businesses face a unique set of management challenges arising from an overlap of family and professional matters and activities.
What are the Various Types of Family Businesses?
Simple Business, Simple Family
In this model the successor’s role is clear and unchallenged, siblings do not get involved, and the family’s commitment and heritage contribute to the firm’s success.
This model has worked well, but it is vulnerable as it places all bets on one candidate.
Businesses like this are focused, with a concentrated family structure. With only a few family members involved, they do not need complex policies for the business. This type of family business is not diversified or complex and benefits from centralised management.
Simple Business, Complex Family
These types of businesses are also relatively simple, but many family members instead of just a couple, are involved in the management and ownership.
A family constitution that clearly sets out values and policies for how the family owns, manages, and relates to the business, is helpful for these types of firms.
Complex business, simple family
Firms, where the owners typically have small families and big markets to play in, fall into this category.
With only a few family members involved, it is important to professionalize this type of business to limit its dependence on scarce family talent.
Merit-based leadership and mature corporate governance are a minimum requirement.
Complex Business, Complex Family
Managing firms, where both the business and the family has largely complex structures, requires significant investment and effort in governance systems to be successful.
This type of family business needs mature and practical policies, that set clear expectations for the leadership, and engage development programs to enhance leadership talent.
What is Succession Planning?
In case of an owner’s death or retirement various policy, cash flow, and management decisions must be taken and planned for, this is known as succession planning.
Why is Succession Planning necessary for Family Businesses?
New leaders may be inexperienced, unprepared, and have a very different approach to leadership than their predecessors.
Succession planning is essential in ensuring that the business is handed over to new management in a smooth and seamless manner. Lanop does this by adopting efficient measures to minimize tax obligations, submitting, and compiling accurate paperwork, and complete compliance with HMRC and Companies House.
Why do You need an Accountant for Your Family Business?
50% of all family operated business fail to take off and this figure is at 90% for restaurants, rather alarmingly, I would say. External advisors are often seen to play an essential role in the growth and sustainability of small and medium sized enterprises. By using an external advisor, companies mitigate deficiencies they face due to a lack of internal resources. Family firms often exhibit certain characteristics that affect the need for external advice.
Lanop holds explicit knowledge regarding accounting standards and processes, as well as the tacit knowledge to apply them in the business world. Such knowledge is a valuable resource as it takes a considerable amount of time and effort to attain. If a firm does not employ an internal accountant, the decision to outsource external accountants enable the firm to overcome the problem of having limited resources.
Research has established that family firms have distinct deficiencies relating to human capital. This deficiency arises from their tendency to recruit from within the family, restricting their pool of potential employees.
Lanop helps your family business last forever. Our family business specialists, advise and guide clients on a wide range of financial issues, including VAT registration and submissions, payroll, and PAYE processes, HMRC tax investigations, and tax planning among a multitude of others.
Services offered at Lanop
Lanop: The Home Stay for Family Businesses
Lanop Accountants eliminate the need to search for an all-encompassing accountancy firm. Our corporate headquarters in Putney, London provide practical and efficient solutions to all your accounting needs.
Our skilled tax and finance professionals work diligently to make your life simpler by reducing financial stress and making business models more lucrative and efficient in accordance with up-to-date regulations.
Aurangzaib Chawla
At Lanop, I am the Managing Partner and resident Tax Specialist. I will Read More
Aurangzaib Chawla
Tax Partner
I provide my expertise and services to a diverse range of clients involved in the Architecture and Construction sector, assisting them in resolving industry-specific accounting and tax issues. With the help of my extensive experience and understanding of this industry, I provide attention to detail advice that is completely specialized to your business structure needs, allowing you to worry less about your daily accounting needs and focus more on earning profits.
Muhammad Sohaib
As a Financial Accountant at Lanop, I assist in tax, succession, and strategic Read More
Muhammad Sohaib
Financial Accountant
I specialize in Finance and Accountancy at Lanop. I provide financial and tax advice to partnership businesses. I’ve assisted multiple business owners (from various industries) with their partnership’s business incorporation, paperwork, and legalities. Clients rely on my expertise, practical advice, and real-life problem-solving skills for their financial and accounting needs. Call Lanop today to fix your finances and expand your business.
Client's Testimonial
When I was looking for an accountancy partner, Lanop was the first provider to respond, inviting me in for coffee to discuss my business plans and offering guidance on how to structure the business. It was a crucial first meeting, I had so many questions and worries about starting out on my own, but the team gave me all the help I needed to register and run my own company. We’ve been trading for over three years now and the Lanop team have provided an excellent service, answering all our questions, managing our payroll, VAT, pensions and annual reporting processes without a hitch.
Steven George-Hilley
Founder
Centropy PR
Why should you choose us?
Digitalized Solutions
Professional & Client Centric
Experienced in Helping Multiple Family Businesses
One-to-One Consultation
No Surprise Costs
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