GUEST BLOG
Gary Deans, KPMG family business practice
Gary specialised in tax matters throughout his career, advising on personal and corporate tax issues. As Head of Family Business for KPMG in the UK, Gary leads a national team focusing on advising family businesses and their stakeholders. He is also a frequent speaker at family business events and conferences. He is a member of the Advisory Council of the Institute for Family Business, and of Oxfam Scotlands Advisory Board.
With the economy picking up, and many family businesses in the construction sector looking to take their next steps, it is essential for growth that they consider the following key points:
Plan, plan, plan!
In order to develop it is important to create clear growth plans and understand how to deliver on them. As like all businesses, family businesses in the construction industry vary in their key goals. Some are interested in finding a partner to deliver significant extra firepower through a joint venture, and of course there is always the option of a sale if this complements changing family dynamics.
Understand the investor**
Accessing growth capital is a complex matter, and can be even more challenging for family businesses in construction due to the tendency to maintain control, which can limit options. Its important to understand what an investor or funder will seek, to be clear on what is acceptable to you and the business and, with this in mind, to position yourself attractively to secure the investment or funding sought.
Lower your risk
Investors look for growth to fund their return. You will find that what varies is their attitude to risk, and whether that return is sought in the short, medium or long term. Communicating how the money is to be used and a clear plan for how growth will be achieved is vital to maximising your chances to secure funding.
Be open-minded
The main cultural obstacle that I see for many family businesses within construction is the need to open itself up to external oversight from an investor. Requirements will vary from relatively basic financial information, to a place on the board and an active role in the running of the business. It is important to evaluate the investors likely requests with an open mind; after all they can bring new insights, experience and contacts – which can help a business grow.
**download the KPMG report on Financing Family Business growth through individual investors
