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Family Business

Did you know that some of the world’s leading businesses are family run businesses? Bacardi, Lego, Heineken and Hermes are all family businesses – the dominant business model in most developed economies.


In the UK, family run businesses account for 75% of all SMEs and family-run businesses dominate the farming industry. In the South West the great majority of farms are “established” family farms” ie operated by at least the second generation.
However, the statistics show that only 30% of family businesses generally survive to the second generation and that only 10% survive into a third generation. 


Given that the future of agriculture in the UK depends on maintaining a healthy and dynamic family farming ladder for new entrants to climb, how can you future proof your family farming business?


The transfer of business ownership and control to the next generation is arguably one of the most critical stages in the development of a farming business. The key is to plan for an intergenerational transfer of the farming business with the aim of passing control of a sound, and often improved, business onto the next generation.


Successors need to be identified in good time, offered appropriate training and given the opportunity to take control in good time so as to give the successor the chance to make decisions for the long term.


The three main stages of a successful transfer of a family farming business are:
• Experience – ensuring that the successor obtains the appropriate skills, education and experience over an appropriate period of time
• Timing – ensuring that the managerial control is effectively handed over to the successor as the principal withdraws from the leadership
• Inheritance – the legal transfer of ownership of the business assets, such as land


It is essential that these processes are linked and well planned with the help of professional advisors to ensure that neither the farming business nor the individuals involved are adversely affected either by the timing or the nature of the handover.


The successful transfer of a family farming business can have a powerful influence on its future development. The development and existence of a successor can provide a powerful motivator for ongoing investment and energy in the business
Failure to achieve a smooth and timely succession can lead to the depletion of capital assets, the disillusionment of the would-be successor and, ultimately, the failure of the business.


Everys Solicitors has generations of experience in dealing with family farming business and their succession.  If you would like to discuss your family farming business in more detail please contact Kate Stamp or James Griffin on 01823 239636 or email law@everys.co.uk

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