In place of the annual networking event in Newmarket, Birketts held this year’s East Anglian Family Business Forum virtually in the form of a webinar co-hosted by Paul Andrews from Family Business United and Alex Nelson, Partner and Head of Birketts’ Family Owned Business Team.
During this event, Paul reflected on the resilience of family businesses across the UK in 2020, which was followed by an interview with Stuart Dantzic, Managing Director of Caribbean Blinds. The event closed with a panel discussion on staff engagement and giving back to the community. To watch the session in full, including the Q&A, please visit Birketts YouTube page.
Resilience in the family owned business sector
Paul opened by highlighting how some of the trends which we have recently seen emerge in the family business community at a national level have also impacted businesses in East Anglia. He added that the sense of community at the heart of the family business sector, came to the fore in 2020 as family firms demonstrated their resilience in adapting to the conditions created by the pandemic.
He went on to outline some statistics about the family business community: “88% of all UK businesses are family owned. There are around five million family firms in the UK today and they employ 14 million people, which is about two-fifths of the total employment across the country. If you look at the figures, that’s £1.9tr in revenue and £196bn paid to the Exchequer and a contribution of £657bn to the UK GDP, a third of total GDP. This is huge and deserves recognition.”
He noted that the challenges and uncertainties for many family businesses have revealed winners and losers, dependent on the sector they are in. Some family firms adapted quickly, whilst those in the hospitality and travel sectors have been less fortunate. As a result it is impossible to generalise.
Paul said: “Family businesses face significant challenges as a result of the people and relationship issues that arise, in addition to the normal issues faced by all businesses.”
Paul added that although nobody knew how the business world was going to react to the lockdown, the majority of businesses responded well, taking one of three routes – either closing completely, carrying on as normal /pivoting their business or changing their model to produce PPE, organise community food distribution or support the NHS.
Whilst many hadn’t heard of Zoom or Teams until March, many family business owners adapted and engaged with technology, working hard to use their digital presence to build a sense of purpose and value. Paul stated that for better or worse, the pressures generated by 2020 have helped to speed up decision making processes for family businesses, particularly around building an online presence.
The pace of digital change in 2020 was unprecedented and went hand-in-hand with a shift to a more short-term focus. By using this as an opportunity to evolve by either investing in new products or by establishing a digital presence, family businesses have brought forward their strategic planning by years.
Paul added that successful family firms stand the test of time because they’re not complacent. Whilst succession is always on the horizon, focusing on business priorities over the last nine months has helped many companies create the essential platforms they need to grow going forward.
Many of the issues facing family businesses today arise as a result of the economic climate both nationally (Brexit) and internationally (the US election). The broader fiscal uncertainty, the lack of travel and supply chain issues, are on the boardroom agenda at businesses across the country.
However, despite the tumultuous backdrop, Paul stated that issues around next generation succession remain a key topic in the family business community. What this year has provided is an opportunity for the next generation to step up, to add value and take leading roles.
Paul concluded by saying that it would be difficult to know the impact that the announcement of the new tiers would have on businesses. However, many companies are on the cusp of coming through not one, but two lockdowns and it is clear that family firms will be here for generations to come.
Leading a second generation business through uncertainty
Paul then introduced Stuart Dantzic, Managing Director of Caribbean Blinds, a business based in Sudbury in Suffolk in order to discuss the role of second generation leaders in terms of leading a business through a period of uncertainty and change.
Stuart provided some background on Caribbean Blinds, a second generation manufacturer of all types of external shading including patio awnings for shop fronts, coffee shops, restaurants and gardens as well as external blinds and garden pergolas and gazebos.
Founded as a limited company in 1987 by Stuart’s parents who spotted a gap in the market, the company started as a trade supplier and grew over the years and now works across all sectors residential, commercial, specifier and trade throughout the UK.
Stuart said that growing up with entrepreneurial parents inspired him and he progressed from sweeping floors in the summer holidays to becoming involved in the sales and the marketing aspects of the business. Although he was actually planning to be a lawyer he felt he could add value to the growing business and began working for the company part-time alongside college. In 2001 he decided to take the plunge, dropping out of college to join the family business full time.
Before Stuart and his brother took over the business, the family had regular discussions to define their roles. Taking over officially in January 2017 after a transition period, Stuart stressed the importance of sitting down with team members to let them know what was happening, and asking for their input. The brothers were glad to have their parents’ guidance at the end of the phone.
Stuart said: “Communication this year has been more important, than ever. And I think when you’re through a business transition from first to second generation second, communication, most importantly, with your team members, is key but also communication with all the stakeholders in the business from suppliers to the customers.”
Putting their stamp on the business and moving it forward required investing in the production facility, engaging key members of staff, changing internal processes and refreshing the brand. They also set up the largest show site in the UK for outdoor shading.
Stuart said that the number one value as a family business, is integrity. Having been involved in the business for the best part of 20 years, much of that with the same loyal staff, Stuart said that their passion is recognised and valued by their clients. He said that for a lot of family businesses, it’s more than just a business – it’s their name and their legacy.
He also emphasised the importance of community engagement, mentioning that much of their workforce is drawn from the local community. By sponsoring the AFC Sudbury Football Club as well as a range of smaller charities, the company has been able to build its profile locally which has helped to generate a host of potential applicants. Stuart says that he values attitude over skill and seeks out those people that he can invest in because they are passionate about a career rather than a job.
The biggest challenge the company has faced in 2020, has been the supply chain. Easter is normally the start of the season, but manufacturing was shut down for a short time as a result of the pandemic. However, the offices stayed open with staff continuing to work from home and as a result of people developing their gardens and the boost in staycations, orders shot up 20% month-on-month, doubling by October.
By keeping pressure on suppliers so that the company received timely shipments, lead time was kept short and the demands of a client base who wanted to enjoy the good weather was met. Stuart said that the company benefitted from consumers investing the money that would normally go on holidays and meals out on home improvements.
A key part of staying successful is investing in staff, manufacturing and marketing and looking to long-term goals. With family owned business, Stuart suggested it was good to consider where you might want the company to go in the next 30 years and think about what might be passed to the next generation.
Even though the company’s plans to expand their factory were delayed due to the pandemic, Stuart stressed that it was important to review, adapt and implement the changes that will ensure businesses can still achieve their goals to grow in line with the projected forecast year on year.
Stuart said that the best piece of advice for a next generation managing director is “to listen to the people around you who have been in the business for a period of time, and have a wealth of knowledge and information available. Although it is always possible to learn from your mistakes, seeking counsel from experienced parties can help you execute your plans with even more finesse”.
To watch the webinar in full, including the Q&A with Graham and Edward Burchell of Challs International and Daniel and Joseph Staines of JMS Engineering Consultants, please visit Birketts’ YouTube page.
If you have queries on any of these topics or would like to know more about the services we offer, please contact our Family Business team.
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