Family Businesses
Introduction
Family businesses are an important part of Australia's economic fabric:
“...67% of all Australian businesses are family owned, providing 55% of private sector employment and 48% of total private sector wages and half of the gross industry value added in Australia……43% of Australian family businesses are run by second generation; 31% by the first generation and 16% by the third generation…”
KPMG as quoted by Louis White, 2023
“…Family businesses are more energized than other businesses……there is good and bad energy and a lot more emotion and passion. It's a completely different type of culture with different mentality. It's more about the people and customers…”
Angus Kennard as quoted by Louis White, 2023
Basis for family businesses to succeed
“…There are three main reasons family businesses survive and thrive: entrepreneurial capabilities and strong holistic performance combined with a deep emotional attachment to the business based on strong identification…”
KPMG as quoted by Louis White, 2023
Some tips for family businesses to succeed:
“...- Build the team around you; don't try to do everything yourself……
- Things can't always be equal but they can be equitable……
- The family members not involved in the business need as much information as everyone else…”
David Hammon as quoted by Louis White, 2023
NB There are no hard and fast rules as each family and business is unique and has its own nuances.
“...There are multiple forms of capital to consider, including financial, infrastructure, social and human. As humans, the emotional factors need to be considered carefully and navigated with respect…”
Lea Boyce as quoted by Louis White, 2023
Some ways to develop an effective strategy:
“...- Develop clear position descriptions for each family member
- Clearly outline their role and responsibilities, who they answer to and how they can resolve disputes or address difficult conversations, just like any other employee
- Leave work at work and personal life at home…”
Soibhone Nascimento as quoted by Louis White, 2023
Family member intrinsically rely on each other for the business to succeed.
“…recognize that if one family member has burnout, it can have a domino effect on the entire team…”
Louis White, 2023
Succession strategy
“...They should never assume that the rising generation will want to take over a family business or that they have the ability to take over……succession planning can be an opportunity for the rising generations to take time to understand what they want and what they believe their skill set to be. This needs to be compared with the current generation and what they believe. Sometimes succession planning is actually an exit from the core operating business because the rising generation are not equipped to, or don't want to, take over…”
Lea Boyce as quoted by Louis White, 2023