Good economic news might be a bit of a rare thing at the moment but new research from KPMG finds that European family firms are feeling buoyant.
The European Family Business Monitor suggests that 71 per cent of family firms are feeling confident or very confident in their business’s prospects for the next 12 months. Only two per cent feel negative. Moreover, 57 per cent report increased turnover over the past year, while 27 per cent maintained revenues. So does being a family firm mean you’re more likely to succeed?
For a start, conflict resolution can be a doddle, says business growth consultant Isla Wilson of Ruby Star Associates, “I often work with businesses where the senior team are in conflict and nearly as often I work with teams who are so conflict adverse that they become incapable of making decisions. Family businesses often have a strong track record of disagreeing, discussing, deciding and then moving on. This can mean that family businesses achieve a culture of productive and considered decision-making much faster than business owners who are unlikely to have to face each other over their Christmas dinner.”
And succession planning is easier too, for obvious reasons. Says Wilson, “Family businesses often have a very strong culture of planning for future generations and this can result in more resilience as people exit the business.” The KPMG report found that more than 50 per cent of family businesses have a member of the next generation in management roles within the company which will allow them to prepare for succession planning earlier in the process.”
Loyalty is a given (well, unless you’re working at the Queen Vic). If you’re in business with your family, the barrier to leaving is simply higher than if you’ve applied for a job on the internet. Says Wilson, “Whilst this is why it is important to consider whether working with family is for you, it is also an advantage for successful family business. In general, family businesses tend to be better at discussing and resolving gripes and retaining people (including non-family members) for the long term.”
The very best family businesses know how to plan for the future. Whilst this isn't true of all family businesses, says Wilson, “the very best of them know how to plan for the future, they know that the strength of their business lies in retaining what has made the business strong whilst also creating space for a new generation with new ideas and experiences.”
Commitment may well be stronger in a family firm. “Some family businesses start with just one person and family members join as the business grows, others start with two or more relatives from the start. Whatever the background, it's easy to see that the more of the family who are part of the business the stronger the commitment to making it work.” Wilson adds, “In my experience the willingness to innovate, try things, and consider all options is a real feature of successful family businesses.”
The Institute for Family Business estimates that around 12 million people are employed by family businesses in the UK so they must be doing something right.
Maria Whitehead runs Hawkshead Relish, which she set up 18 years ago with her husband Mark. Her father was also involved from the word go as a joiner making shop fittings and project managing. These days Maria manages finances and sales and Mark works on the products and oversees production. The children also work for the company, running a retail shop and managing social media, Maria’s brother manages the warehouse in Ambleside and his wife runs the hamper-packing department.
Whitehead says that working for a family firm makes for less pressure to climb the corporate ladder, “to go through endless appraisals, to pitch for your own job.” She adds, “we are a small business and as such if someone isn’t pulling their weight then it is very clear and we have do something to motivate and get them back on track. Knowing each and every member of staff, their families and their idiosyncrasies means we can bend the rules, help and have a happy and contented team. As a family we can support each other and talk freely about issues without worrying about your back or if confidences will be betrayed.”
Whitehead says that that being in a family firm could mean making faster business decisions: “I am not sure if it’s because we are a family business or just a small business, but as we share our values with everyone, they all know us well enough to know how we want things to be, and we can adapt and react to market forces quickly enabling us to move the business direction if need be.”