Small Business Q&A: Kieran McCarthy from Hughes Blake Chartered Accountants

In this week’s Q&A, Kehlan talks with Kieran McCarthy from Hughes Blake Chartered Accountants. Kieran has written a book entitled Family Business: A Survival Guide and talks with Kehlan about the book and why he decided to write it.

So, Kieran what’s the book all about?

In my job at Hughes Blake, I come across a lot of businesses looking to pass the family firm from parents to sons and daughters. But what many people don’t realise is that it is a complex mechanism and not simply a case of handing over the keys. Some 75% of businesses in Ireland are family-owned. Of those, two thirds of businesses will fail within a short period because they haven’t taken proper account of factors which influence the hand-over.

And what would those factors be?

The first thing is giving yourself time. Many see this as a once-off event. That you sign documents and then it’s the responsibility of the new owner. For the book, I spoke to a business which took seven years to hand full control over to members of the family. It’s a slow process and often means the current owners take a back seat in the company and don’t walk away fully. Whatever will keep the hand-over as smooth as possible should be done.

How do you deal with issues such as entitlement within a family?

Just because you’re the son or daughter of the owners doesn’t always mean you’re the best candidate for the job. A company is still a company and workers depend on strong management to guide its future. So set out clear guidelines and create a steering group. Clearly outline what is expected of new management and the direction of the company.

An important question to ask as well is, has the new owner worked outside of the company?

Often learning new skills away from the company process can be very advantageous and can help in a bottom-up approach to business rather than a top-down solution.

How do hand-overs affect family relations?

It can be a difficult process, but when approached right it can be done without affecting family relations. If a family member is not given the ownership then it needs to be defined very clearly why not. A clear idea of their role in the company in future must be given. The company needs to be professionalised and looked at like any business that isn’t family-owned. Everyone must have a defined role, and AGMs and frequent meetings will help.

Family Business: A Survival Guide is available from www.ChartedAccounts.ie