How to turn a start-up into a lasting family business
Many parents are used to providing handouts to support their adult children, whether towards the purchase of their first car or a deposit for a flat. In the case of Miles Dunkley, his father Graham went a step further and gave him a slice of the high-end cosmetics and toiletries company that he had founded 15 years previously.
“I was overjoyed, not least because I had not asked for it, or even expected it,” the younger Mr Dunkley recalls about that first gift of a 25 per cent stake, made when the company, SLG, had just completed its first significant acquisition.
That was back in 2000, when Mr Dunkley was 33 years old, and his father, 30 years his senior, was preparing to step back from the business. It was followed by a tranche five years later that gave the younger Mr Dunkley control of the company. Mr Dunkley is now chief executive of SLG, which generates £40m in sales and employs 160 people across offices in the UK and Shanghai.
As much as 98 per cent of the world’s economic activity is accounted for by family businesses but for many companies, making that transition from entrepreneurship to a smoothly-run family business is difficult, says Allan Cohen, a professor in global leadership at Babson College, a US business school that specialises in entrepreneurship research.
“When a business has been built from scratch, many entrepreneurs have difficulty letting go of running it, whether to experienced executives or their own children,” he says.
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