We’ve heard many different business stories here at The Women’s Organisation, but never have we heard one quite like Ruth Smart’s and the business which she is the Executive Director of, Tranect Ltd. Tranect is a design and manufacturing company for electrical components used for power generation and transmission. Ruth is currently in the process of something rarely seen in the UK, establishing a Family Council so that her business can be taken over by her children when she retires. We spoke to Ruth to find out more about her background, her business and how she is implementing this interesting business model.
Prior to founding Tranect Ltd, Ruth worked for different multinational companies designing and manufacturing this type of product, after studying at Brunel University and becoming a Chartered Engineer. Ruth told us; ‘I wanted to start up my own business because I kept on being made redundant as manufacturing plants moved overseas. When I had the opportunity to buy an obsolete product range and redevelop it. I took out a bank loan, secured on our family home and invested all of our savings and my redundancy money into the business.’
During the initial years, like many business owners starting own, Ruth faced some challenges such as cash flow and other issues which she faced head on. She told us that she has a supportive partner, and although she worked for longer hours, she enjoyed the benefits that come with being your own boss such as deciding when she needed to be in the factory and when she could be at home. Tranect Ltd. has been running for 15 years now, and it’s really starting to get interesting at this point a Ruth begins to think about what will become of her legacy after she retires.
She told us; ‘Originally the business was to provide a secure source of income for my family, but now that they are grown up and working, I can see how the business can continue to provide security for all the members of the family, and potentially my grandchildren. It can be a legacy that I pass on.’
And the way that Ruth will pass on her legacy is through the formation of a Family Council who will take control of the business, so when Ruth steps down as the Executive Director, her children will be able to take over the running of the business through the Family Council. Ruth says; ‘When my children were growing up, they didn’t want anything to do with the business, they wanted to go off and do their own things. But now that they’ve graduated, had some time out in the big wide world and have their own families and children, they are starting to appreciate the benefits of a family owned business. Where we have far more control over the hours that we have to work, and we’re better able to get our work/life balance right. So, now my son and son-in-law work in the business, and we are having discussions about how to hand over the business when I retire.’
This was the conversation that led Ruth to seek help through her local growth hub where she came across The Women’s Organisation. Ruth has been working with our Senior Business Adviser, John Jones, on an ERDF (European Regional Development Fund) funded business growth programme; New Markets 2, and has found specific support from John in transferring the business from one generation to the next; ‘I’ve been working with John, which has been really helpful. We’ve ensured that the women within the family are all equally represented within the Family Council going forward and are provided with the training and support that they need to be able to fulfill their role.’
So what has Ruth found challenging throughout this journey? Namely, explaining this interesting business model to the rest of her family; ‘The strangest explanation was to my youngest daughter who lives in London and has nothing to do with the business whatsoever, but will inherit a third of the business in time. I had to explain that as the non-executive shareholder, she would have to take over chairing the Family Council including the role of having to sort out any disputes in the business going forward. She responded saying that she doesn’t know anything about that sort of thing, but The Women’s Organisation and their recommended consultants can provide the training and support she needs to fulfil that role.’
What we found most interesting about this business model of the Family Council was that they are relatively unknown in the United Kingdom. The Institute for Family Businesses has general guidance for succession planning, but Ruth said; ‘We are using a model that has been adopted by family businesses from around the world, and it’s quite a typical way for German family-run businesses to operate. It’s one of the greatest successes of German businesses that they are able to have the second, third and fourth generations come into the business, learn about it and provide the business with continuity and continued investment. I think there is something in this that we could all learn from.’
So, now Ruth has her family on board and the Family Council is established, she is safe in the knowledge that the business she has worked for half her life to establish and grow, will continue after she retires, in the hands of her children and grandchildren.
If like Ruth you are looking to make changes and grow your already existing business, please get in touch with us to see how we can help you grow. As a local growth hub broker we are here to offer you advice and guidance whatever stage your business and help you to connect to relevant support. Email us on firstname.lastname@example.org or ring us on 0151 706 8111
Contact Details for Tranect Ltd
Tel: 0151 548 7040