Running a business is tough at the best of times, but what about doing it with family members? Is it possible to make it work when you’re related to your business partner?
The stats are interesting. According to a report by the Family Business Review, just under a third of family businesses (30%) make it into the second generation and 12% are still operating into the third.
But with the negative numbers, there are the success stories. The Morrises are the billionaire brothers who own Home Bargains and they have set the bar high for making family firms work well. So, what can we learn from families like the Morrises?
Whether it’s a national brand or a local chain, family-run businesses tend to know where to invest and plan for the future. This is usually because focusing on the long-term goals rather than trying to get quick successes secures the future of the business.
For this reason, these businesses, such as Swift Direct Blinds, which recently celebrated 50 years of trading, are less likely to join with any mergers and are better at organising expenses in ways that are beneficial for the growth of the company. This puts them in a great position should things get tight, for example, during a recession.
On the subject of recession, family members in business together are inclined to be dedicated to sticking it out through the good, bad and ugly times. This is largely because their commitment will pay off when they can hand the business to their children. It’s a business that’s there to secure the future of future generations, and as the stakes are high, there has to be a strategic team effort at every stage to make it work.
Keep the good ones
It’s not just family members who stay loyal to the company. Staff retention tends to be high for family firms, with just 9% turnover levels, according to Harvard Business Review.
The reasons for this come down to high levels of trust between employer and employee; a strong working culture; and a sense of familiarity. Employees are more likely to feel like they’re part of the family, and this goes a long way towards keeping them happy in their role.
It’s clear that family-run businesses have their plus-points. One of the main ones is the sense of community they build. The most successful companies tend to be formed by families that pull together and work through every strategy and issue together.