RUNNING a successful family business means fully understanding the dynamics of how a family business operates and not being afraid to bring in expertise from outside. Be prepared for hard conversations around succession planning and have mutual respect for all members of the family involved regardless of their position.

These were the key points raised at The Herald Scottish Family Business Breakfast at Glasgow’s WEST on the Green yesterday, where the keynote speaker was Stuart Laing, the executive chairman of Laings, one of the largest independent family jewellery businesses in the UK.

Joining the venerable jeweller in 1970 – it was founded by brothers James and William Laing in 1840 – Mr Laing revealed that while his parents wanted him to go to university, he failed to achieve the necessary qualifications. “My handling of a rugby ball was excellent,” he said. “But Saturday was such an important day in the shop so my father put a stop to it.”

His lack of academic qualifications failed to hold him back, however, and with his brother, Michael, he became the fifth generation of the family to run the jeweller. “We complemented each other, there was no acrimony and we both had an appetite for expansion,” said Mr Laing, describing how the business acquired a jeweller in Edinburgh with a lucrative Rolex agency then went on to expand into cities including Southampton and Cardiff.

An attempt to purchase a jeweller in England, owned 50:50 by two brothers, led to them divide the business. “We were advised to sit down and decide what we both wanted to do so we split the business and remained pals. We had been on the verge of signing the deal and it turned out that one wanted to sell but the other didn’t,” Mr Laing added. “An adviser warned that we could find ourselves in the very same situation.”

Today, the business is run by the sixth generation of the Laing family, his daughter Wendy and her husband, Joe Walsh. Michael’s son Richard is also part of the management team. 

In a lively Q&A panel session, Lord Willie Haughey, co-founder and chairman of City Holdings Group, said: “Sometimes you have to put the family aside and do what is right for the business – and I would always advise you to have a non-executive director involved as a buffer.

Paul Costello, co-founder and director of award-winning estate agent Upload Abode, said that planning ahead was crucial, particularly for a high-growth business like his is at the moment. “The key is to look ahead and see where you are likely to be in the next six to 12 months,” he said. “For example, if you think you’re going to need more people, put plans in place now – don’t wait until you need a key person before hiring.”

For Jane Wylie-Roberts, chief executive of recruitment agency Stafffinders, a second-generation family business, self-development and understanding the dynamics of a family business have been pivotal in her firm’s growth. “Find the right expertise from outside to help you and do that early on,” she said. “People often shy away from the hard conversations but you need ask people what they want, see what their skillsets are.”

Having mutual respect for the other family members in the business was one of the points raised by Cara Mackay, managing director of Errol-based shed-maker Gillies & Mackay. Highlighting some strains within her business, founded by her father in 1989, Ms Mackay said: “Conversations around succession planning need to happen as soon as possible and you need to speak truthfully.”

Speaking about the many challenges facing a family business, Calum McRae, chief executive of Marzipan Media, which provides music systems for retail, hospitality and leisure venues, warned that incoming generations had to recognise that it could be wrench for a parent handing over a business to a son or daughter. “When you’ve been at the helm for 40 years you can’t just walk away without having something to fill your time,” he said.

Mr McRae also said it was healthy for businesses to bring in non-family members, and promote them over a family member if it was the right thing to do to futureproof the company. “When you run a family business you need to provide context and direction,” he added.

The conference was sponsored by Business Gateway, Campbell Dallas, Clydesdale Bank, Strathclyde Business School, TL Dallas, Turcan Connell and Western Pension Solutions, and Stand.

Hugh Lightbody, chief officer of Business Gateway National Unit said: “Family businesses contribute to job creation, creativity and innovation across Scotland. This event was an excellent opportunity for all in attendance to share their knowledge and expertise and the keynote speakers shared some valuable insights and observations. Business Gateway are proud to have supported this event, which so brilliantly demonstrated the strength and success of Scotland’s family businesses.”

Campbell Dallas said: “The challenges and insights discussed at the Family Business Breakfast reinforced the particular approaches required to run a family business. A passion to build on a business passed down through the generations and considerations required to meet the complex needs of a family business were common themes.”

At TL Dallas, client director Bernard Dunn said: “We had superb insights from the family owners across a range of business sectors. Stuart Laing delivered a superb keynote speech, and the panel discussion was open, honest and very lively.”

Mike Kennedy, director of Western Pension Solutions in Scotland, said: “Family firms are important to the economy and events like these help family business owners to feel part of something bigger, to recognise that they are not the only ones dealing with the challenges they face and to be able to discuss matters like succession with fellow family business owners.”

Strathclyde Business School commented: “Family businesses make a significant contribution to the Scottish economy. They have strong loyalty to their local communities; a well-developed sense of social responsibility; and create around them clusters of suppliers, customers and advisers as well as employees.”

Jack Gardiner, family business partner at Turcan Connell, commented: “The number of people in the room and the quality of the businesses represented are testament to the success of the seminar.”

Executive creative director at Stand, Stuart Gilmour, added: “Scotland’s family business community remains incredibly dynamic and ambitious despite the uncertainty we are all facing in the UK at the moment and it is encouraging to see these businesses are embracing every opportunity to grow their brands in the future.”