FAMILY BUSINESS: Putting the success into succession

By Ged Henderson

15 Oct 2024

The Conlon Group

It is the question that faces every family-run business at some stage. What happens next?

For some the answer is simply to pass the baton on to the next generation.

However, keeping it in the family isn’t always a viable option.

Other businesses take the sell-out route but that can be fraught with difficulties.

Here we look at three very different Lancashire family businesses and the very different routes they have taken when it comes to their future directions of travel.

CASE STUDY 1: BUILDING FOR THE FUTURE

In 1961 five brothers working on a road project called ‘The Preston Bypass’ founded a construction company, giving it their family name.

More than six decades after that work, on what is now known as the M6, the Conlon name became an important factor when it came to deciding the company’s next direction of travel.

This summer the Bamber Bridge based business, revealed it had moved from family ownership to an Employee-Ownership Trust (EOT).

EOTs have become increasingly popular. It sees a controlling interest in the company transferred to a trust which is then held for the benefit of employees.

The change in ownership followed many months of planning by the board of directors and the Conlon family.

Chairman Michael Conlon says that when it came to looking at the future of the business, passing it down to another generation of the family was a non-starter.

He says: “We had 44 family shareholders in total. Quite a few were third generation, none of whom were showing interest in joining the company. Some live long distances away and felt ‘disconnected’, whist a number just wanted out.”

The board and family explored the options available to them. Selling out to a bigger company was also dismissed.

The Conlon legacy was always going to be an important consideration.

Michael, 63, says: “From the outset we wanted the company to stay with the same ethos. From the outset, our founders, those five young Conlon brothers, put people at the heart of the company.
“We also wanted to keep the family name, which is a good name in construction.

"Selling out to a national business would have seen staff going. It really wasn’t on the radar.”

The idea of any management buy out was also ruled out.

Michael says: “You have to borrow so much third-party debt; you end up working for the banks.”

He adds: “We’d heard of EOTs but didn’t know much about them. Once they were explained it seemed the way to go.”

The current board of directors will remain and will still have responsibility for running the business. The directors will now be accountable to a trustee board, which will include two elected employee trustees.

Michael says the EOT also means that the company’s 72-strong directly employed workforce now all have “skin in the game”.

He adds: “Clients will see no changes, things will stay exactly the same for our supply chain.”

Over the past 63 years Conlon has been involved in standout projects in Lancashire and beyond, including the revamp of Preston Bus Station and the ongoing Harris Museum restoration in the city.

Michael says: “We have always been very much a family company and we’re very much going to carry on as a family ethos business. It is the
legacy that we are protecting.”

CASE STUDY 2: NEXT GENERATION WEIGHS IN

Grant McGeever took over the role of managing director from his dad Tony 14 months ago. It was a measured move for their family business.

Rospen Industries manufactures weighing and metering equipment for various sectors including food, chemicals, wastewater and construction.

His father’s shoes were big ones to step into.

Tony had doubled the size of the business, based at Waterside Business Park in Haslingden, in his last three years as MD.

The succession process went smoothly.

Grant, 33, says: “It was seen as the right time. I’d been involved in the day to day running of the business for years. I’d been involved in every
department, so when the time came it was quite straightforward.

“The workforce and our customers took it well, there was no negative reaction to it at all.”

He adds: “My parents are still shareholders and I know I can go to my dad for advice if I need to.”

Grant, a mechanical engineering graduate, worked at Rospen as a student before taking a job with a greenhouse manufacturer after
graduation to broaden his industry experience.

He rejoined the family firm in 2014.

Today Rospen has a workforce numbering just over 60 with an annual turnover of around £10m.

One of Grant’s immediate plans on taking over was to grow its export sales in Central Europe.

Long-term he is also looking to move the business into a new facility, moving the operation onto a single site, but he adds that ambition is some way off.

Grant’s father joined the business, then called Mass Measuring Systems, in 1988 as a project engineer, becoming a director and shareholder in the mid-1990s.

He bought the company, at this point named Rospen Industries, jointly in 2003, becoming outright owner in 2007.

He became chairman last year after handing over to Grant, stepping
into that role at the age of 62.

Grant’s message to other people who may be set to take over the reins of their family business is: “You know the business, not like someone who has been parachuted in.

“Work hard, work with the staff and listen to them and help them because you are all in it together. You can’t do it without your people,
they are the ones who come up with solutions.

“You need to show leadership, people need to know you will do what you say, and you have to be solid in your decision making.”

He adds: “The plan is to keep the business in the family and keep developing it. We want growth but the right growth.

CASE STUDY 3: FINDING THE RIGHT FIT

In 2019 brothers Matthew and Joseph Thompson sold their family fit-out business to private equity with the aim of seeing it develop and grow.

However, four years later, and with things heading in the wrong direction, Matthew stepped in to reacquire the Blackpool company, turning it back into a family-owned business.

It was a bold move that has seen Thompsons Contracts back on track and thriving once again, offering its fit-out, manufacturing, electrical and solar solutions.

Over its history the company has worked with some of the most recognisable brands in the food and beverage, leisure, retail and
workspace sectors.

Since the sale back to Matthew, its client base has both grown and diversified with hotels, Premier League football clubs and new franchise operators in food and leisure proving a good source of work.

A workshop improvement plan has been hailed a success with increased productivity, staff retention and investment in new equipment.

And the creation of a solar division has provided Thompsons with an additional offering to current clients and allowed it to diversify into
new markets across the industry.

With a team boasting 30 years of combined experience in the renewable energy sector, that operation offers both commercial and domestic solar PV and storage installation.

The growth continues with the company’s new building division, working in the burgeoning care homes sector.

Created earlier this year, it is on site with its first project and has others in the pipeline.

Matthew, 42, who describes the current business’ incarnation as ‘Thompsons 4.0’, doesn’t look back on that PE period with any
affection. He remained in the business post-deal and watched in dismay as it faltered.

With hindsight he believes it was the wrong fit for the company. “Things just fell apart,” he explains.

With things in a bad way, he was offered the chance to buy it back.

He says: “To be honest, reacquiring Thompsons was never part of the plan, but I’m glad we did.

"The aim was to turn the company around and
secure its future for everyone.”

That work to turn around Thompsons’ fortunes has included creating a “robust company structure”. Matthew is also full of praise for the company’s workforce and how they have met the challenge.

The business’ annual turnover is heading to around the £22m mark and there has been more good news for its 100-strong workforce with the reintroduction of its bonus scheme.

This year’s pipeline of work is the strongest the company has ever seen as it works in some of London’s most iconic buildings, football clubs
and transport networks.

Matthew says the company will continue to invest in growth, innovation and individuals.

He adds: “There’s a totally different atmosphere in the business now. The pressure before on everyone was immense.”

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