Insider Media Limited

A lack of ambition is holding West Midlands' family businesses back from realising their potential, Insider has been told. Dani Saveker, former owner of Birmingham metalworker Savekers, challenged business leaders in the sector to "sit down, talk and be honest" about where they want to take their firms.

Speaking at Insider’s Midlands Family Business Breakfast, Saveker said she encountered huge resistance when she tried to grow her family’s former company using outside funding.

"The general consensus was that we didn’t feel we needed to," she said. "There was huge resistance from the family around the fact that they didn’t want debt. That’s a real problem when you want to grow the business.

"The thought of debt upset some of the family members, and that made the jobs of those of us with ambition to grow the company very, very difficult."

Saveker said that often the lines between the ownership and management of a family business often become confused.

"A lot of shareholders don’t realise that sometimes their dividends should be kept in the business to help it grow. There’s a real lack of understanding in this area and the lines between ownership and management become blurred," she said.

"I wasn’t expected to join the family business, and in some ways that worked in my favour, but I had to encounter people who had – let’s say – a lot of emotional baggage. We went through a management buyout to remove certain members of the family that I thought were holding the business back."

Saveker revealed to Insider in September that she had been offered the chance to buy her former company back, but had declined, saying she was "monitoring the situation".

Asked whether she would push through the use of private equity money if she did re-take control of Savekers, she said: "I'd always want the flexibility to do what was needed for a business to succeed and grow - so it’s important to have options.

"The resistance and lack of understanding is frustrating and not in anyone's best interest."

She added that certain questions needed to be asked of any family businesses.

"The first one is: What is the goal of the organisation," she said. "Then they have to work out which members of the family are purely lifestyle-focused. There is often a disjointed view of what the family is trying to do with the business."

Saveker pointed out that just because a person has the family name, it didn’t mean that they had the skill and experience to make the businesses a success, and she said there is often reluctance from shareholders and retired family members to take on new ideas.

"These people are on an entirely different journey to the people who want to grow the business," she said. "What family businesses really need to do it sit down with each other and be honest about where they want to take the business."