Raising Awareness of Family business
Philip Pryor meets with Minister Nash to raise awareness of Family Business Governance
On Thursday 26th July, Family Business Central CEO Philip Pryor met with the Honourable Stuart Nash, MP for Napier and Minister for Police, Fisheries, Revenue and Small Business. They discussed the value of focusing on Family Governance. Philip sought to raise awareness of the challenges and advantages of family-run businesses.
And through this understanding, he hopes to ensure that this significant part of the New Zealand economy can grow and thrive through the generations.
The concept of a family-owned business is not well known in New Zealand. Australia is ahead in this area with the appointment of a Small Business and Family Enterprise Ombudsman (Kate Carnell).
“Family businesses exist in every industry sector, and if we can raise awareness and get information and support out to family businesses, they can grow and prosper,” Philip says.
“And this provides employment opportunities and enormous benefits to the economy.”
Expert in family business resolution
Philip is an expert in resolving large, intractable problems. He has a deep knowledge of family psychology, change, mediation, conflict resolution and negotiation.
“Applying these skills can bring about significant and long-lasting positive outcomes for family businesses in New Zealand and Australia.”
A huge part of the economy
Family business employs an estimated 50% of the workforce in New Zealand–actually we suspect more but we don’t have the research yet.
Most farms, vineyards and horticulture businesses are family owned, and these form the backbone of the economy, as well as providing robust employment opportunities in regional areas.
According to Australian Statistics from the University of Adelaide, SMEs grew their employment rate between 1.4% and 4.8% in 2016/17, while large firms’ employment rates decreased by 0.3% in the same period.
This sector is significant – it needs focus to ensure growth.
The challenges family businesses face
Philip discussed the unique challenges that family businesses face, with Minister Nash.
“Juggling family relationships and business dynamics can be tough. When things don’t go well it can be distracting and lead to poor decision making. And this can tear families and businesses apart,” Philip says.
“Family owned businesses last longer than private businesses. However, only 30% make it through to the second generation. Fixing this can secure lasting, well-functioning business benefits to the economy.”
Advantages of family-owned businesses
Addressing these issues will highlight the advantages of running a family business.
“Family businesses are usually in it for the long haul. FBC works on a 40-year time frame, with many going beyond that. They can be seedbeds of entrepreneurship. They can provide both support and finance for future generations.
They provide huge multi-generational learning opportunities. Core business skills and technological advances can pass both ways between the generations.
And family businesses are often better able to weather fluctuating economies – they are a little more cautious, financially. Agile family businesses can seize opportunities and address issues much faster than many larger organisations,” Philip comments.
Clarify, support, plan
Philip and the Minister looked at ways to provide increased and ongoing support to family businesses. This starts with aligning family governance to match and support business governance. Getting clarity around roles and responsibilities is also fundamental – two heads may be better than one, but two bosses in one family can be tricky.
“Family businesses need to have clear next-generation entrepreneur agreements such as those at A.H. Beard and Kennards Hire.
And they need clear development and transition plans for the current and future generations, particularly in the rural sector. Emotions can run deep on a family run farm and disagreements can be significant,” remarks Philip.
Philip is keen to raise awareness and apply the same approach in a culturally sensitive way to Maori enterprises. His hope is to reduce conflict and shore up employment for future generations.
A professional, collaborative approach
Family businesses need a range of professional support applied collaboratively to thrive and grow.
“Through our agreements at FBC, our goal is to provide information, support and advice to family-owned enterprises that support and enhance their original offerings.
We’re excited about seeing positive movements forward in addressing the gaps and providing more support in this important sector.”
For more information call Philip Pryor on 027 411 8820 or Bob Selden on 027 565 1110