Why does heritage matter to an owner-managed/family manufacturing business?

As Dafferns celebrates 130 years supporting clients, heritage isn’t about looking backwards; it’s about recognising what experience can tell us about what might come next.

For owner-managed/family manufacturing businesses, the value of a professional adviser isn’t simply in explaining last year’s accounts; it’s helping owners ask questions that will shape the next five, ten or twenty years.

Heritage isn’t our product, better decisions are. Heritage is the evidence behind them.

Heritage is foresight

A manufacturer doesn’t need an accountant who can tell them what happened last year, but rather someone who recognises that financial information may be the starting point, not the end point.

Mark Brayshaw, Tax Partner, comments: “If you are a rapidly growing engineering business, conventional conversations might start with depreciation, cash flow and capital allowances. They still matter, but our experience encourages us to ask what comes next.”

How will the investment be funded? Does the ownership structure still work? What happens if growth continues at the same rate, and what does that mean for the value of the business?

Depending on a business’s lifecycle stage, it’s about seeing the next question.

Heritage is stewardship

For those owner-managed/family manufacturing businesses, our heritage means that we have been around long enough to understand that successful family businesses are built over generations, not financial years. Stewardship is different from simply managing today’s numbers. It means helping an owner make decisions that leave the business stronger for whoever owns it next.

Consider a second-generation manufacturing business where the founder is approaching retirement, the company is worth several million pounds and two children work in the business.

The difficult questions are rarely found in the accounts. Does each child actually want ownership? If one wants to leave, how will that be handled? What role will non-family management play? Is the business sufficiently robust to operate without the founder? And, ultimately, is there a structure the next generation can genuinely take forward?

Brian Jukes, Joint Managing Partner, points out: “When we see businesses transition between generations, the accounts aren’t usually the difficult part. The difficult questions are about people, ownership and the future of the business. Succession isn’t simply about transferring shares; it’s about transferring responsibility, capability and confidence.”

With 130 years to call upon, Dafferns’ stewardship plays an essential part in helping our clients mitigate risk and preserve and plan around passing on the accumulated wealth, knowledge, relationships and experience built up over decades within the business.

Heritage is perspective

The question isn’t whether a machine qualifies for tax relief, the question is whether buying the machine is the right strategic decision.

Suppose a manufacturer is considering a £1.5 million investment in CNC machines. A new CNC machine might increase capacity, reduce unit costs and be a gateway to new markets. But it will also require capital, management time, skilled people, potentially impact energy consumption and space requirements, and ultimately require confidence that demand will justify the investment.

Scott Whitmore, Senior Corporate Tax Manager, explains: “We’ve seen businesses grow, and growth creates problems. It isn’t about knowing that capital allowances exist; it’s knowing the questions that need to be asked around the tax answer.”

Increasingly, we see engineering-led businesses becoming commercially sophisticated businesses. Many manufacturing businesses are built on the founder’s engineering expertise. The challenge as they grow is turning that technical advantage into commercial advantage through the right investment, intellectual property and good growth.

Dafferns’ heritage is more than a history lesson. It is experience that can be brought to bear when a business is scaling. The firm has built an ecosystem of local connections. From corporate finance to international trade to commercial property and law, we use these longstanding relationships to connect scaling businesses with the right advice.

Heritage is connections

Local knowledge matters because manufacturing is about much more than just the factory. Dafferns can connect its own history with the industrial history of the region.

Dafferns has grown alongside Coventry & Warwickshire’s business community for 130 years. We have seen the region evolve from traditional engineering and automotive manufacturing into advanced engineering, electrification, autonomous vehicles and increasingly international supply chains.

This history gives us context and means our experience has been built through working with businesses as they adapt and change.

We understand that today’s manufacturing businesses are operating in a different environment from previous generations — but many of the underlying questions remain remarkably familiar. How do we invest? How do we fund good growth? How do we manage risk? And how do we build a business that can outlast its current ownership?

130 years doesn’t mean giving 130-year-old advice

Manufacturing has changed dramatically. The technology, markets, funding options, tax environment and competitive pressures facing today’s businesses would be almost unrecognisable to founder Thomas Mason Daffern. The technology has changed, but the commercial questions often haven’t, nor has the need for good judgement.

Mark Brayshaw sums it up: “Our job isn’t to give you 130-year-old advice. It’s to use 130 years of experience to help manufacturing businesses make better decisions about the next 10. The past doesn’t give us all the answers; it gives us a better understanding of the questions businesses face as they grow, change and transition.”