Dallas was many things – a blockbuster television series, a soap opera, darkly and often unintentionally comic to its many detractors, a template for TV dramas for decades to come – but it was not a great advert for running a family business. All that feuding and greed seemed so far removed from the experience of those, many of whom ran businesses themselves, who tuned in each week as to be from another world.

But how do you compare the fictional Ewings with the all-too-real Redstones, oil barons on the one hand, media barons on the other? Sumner Redstone, who, apart from struggling with £1 billion in debts last year, has tried, of late, to disinherit his daughter Shari, who sits on the board of National Amusements, the family firm, and has settled a multimillion-dollar lawsuit brought against him by his son Brent.

There is a divorce in there as well, a soap opera staple, yet forget the scale of the drama and wealth for a minute and it becomes clear that the Redstones are facing the same problems as any business – ensuring that they’ve got enough working capital and access to credit and coping with redundancy and staff demotivation. Moreover, according to Grant Gordon, founder and director-general of the Institute for Family Business, family businesses have some key advantages: they tend to be conservative, less leveraged and more long-term in their approach than other businesses.

The institute is campaigning for more competitive corporation taxes, for inheritance tax to exempt family business assets, for the enterprise investment scheme to be extended to close family members and, that small business perennial, for red tape to be cut. “We want government to make sure that whatever they do in terms of changing regulation as a result of the financial crisis, it shouldn’t be harmful to the family business sector.”

But the big issue for family firms this year, as in any year, is that of “generational transition”, or succession, something that the feuding Ewings and battling Redstones know all about.

Mr Gordon, who served for 16 years as a board member at his family’s firm, William Grant & Sons, the Scotch whisky distiller, estimates that about 100,000 British family businesses have to deal with the question of who is going to take over the running of the family legacy each year.

Mr Gordon, whose book Family Wars was published last year, is hesitant about talking about his own family business. “I was privileged to be able to work for nearly 20 years in the family business. But as many family businesses do, they increasingly decide at senior level to bring in outside talent. In the case of our family business, it is run today entirely by nonfamily management with family involvement at the overview level.

“Many families are focusing much more on the issue of governance. They look at the family’s skills and ask: ‘Are we the right people to run this business? Are there other ways in which can contribute?’

“Successful family businesses do distinguish quite clearly between the roles of ownership and management and are very cautious in terms of who gets what role and in terms of dealing with the issues of nepotism.”

Research by the institute, in partnership with the London Business School to be published this month will show that older, larger UK family businesses tend to want to diversify and invest in other businesses. Mr Gordon adds that the institute has also commissioned research on the subject of succession in family business and meeting the expectations of younger generations, which will be published at the institute’s national conference in June.

But whether family firms are grappling with succession issues on top of the financial headaches of a recession or not, there are opportunities out there, Mr Gordon believes.

“Many family businesses do have a competitive advantage: I’d re-emphasise their long-term approach and prudence in their approach to finance. There is lots of evidence that larger family firms are much lower leveraged than nonfamily businesses. They have made sure that they are ready for rainier days and we are right in the middle of a downpour at the moment.”

He adds that family businesses, because they tend to have less of a divide between owners and managers (they are often the same people) can make quick decisions which can be vital in the current climate.

Traditionally family businesses have been slow to move into international markets and Mr Gordon hopes that many will now use their financial stability and quick decision-making to capitalise on opportunities to expand and acquire businesses abroad: “Family businesses have been slower than nonfamily businesses to develop overseas.

“This is partly to do with a natural tendency for families to be cautious about growth and to perceive that there are more risks – you don’t want to be seen as the person who lets the family down. You want to be seen as a wealth creator and not a wealth destroyer.”

Family facts

— Family firms account for 65 per cent or three million of the total 4.6 million private sector enterprises in the UK

— Family enterprises account for about 38 per cent of GDP in the private sector and 29 per cent of GDP in the overall economy

— Family businesses provide employment for more than nine million people and account for about 42 per cent of private sector employment.

— Family businesses pay about £47 billion a year in taxes to the Exchequer - equivalent to almost 10 per cent of the Government's tax receipts.

Source: www.ifb.org.uk

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