Why family business?
Our focus is family businesses – from the farm through to large-scale operations and everywhere in between.
Even though it might sound obvious, many family-owned businesses don’t identify as being a family business.
Common business categories business owners think of – and identify with – are usually private or public, followed by the sector the business operates within.
The basic definition for a family business is one that is ‘owned and operated by more than one family member.’ This applies to any industry sector!
So why is the definition and identification of a family business so important? Because it can be a more complex legal entity that requires extra attention.
According to research, family-owned businesses employ more than 62 percent of the workforce and make up to 70 percent of businesses in a free market economy.
Generally, family businesses take care of their staff better, take a long-term view of the business, last longer and perform better – they also have a much better ROI.
We can qualify the return on investment statement based on evidence from the 17 family businesses we work with at Family Business Central.
Our relationship with family businesses goes much deeper than just analysing the profit and loss statements, too!
We become a part of the extended family unit … it’s not uncommon for us to give Dad a lecture for driving the forklift without a high-visibility vest.
Because family businesses are so important to the local economy, they’re an asset that needs to be well-managed, fully supported and encouraged to keep going.
But, there’s one huge risk that all family businesses face … succession.
Interesting fact: Just 30 percent of family businesses make it through to the second generation, and only 12 percent make it through to the third generation.
Family business succession is a real example of the transfer of wealth which has to be actively managed.
If this process is mismanaged or perceived to be unfair, it’s not just the family that suffers – but employees, suppliers and potentially the economy.
Getting issues like succession right is no simple matter, particularly for family businesses. Which is why Family Business Central exists, to help the family business survive and thrive.
So, looking at a business in terms of whether it is family-owned or not (regardless of industry), is an incredibly powerful lens. And if you’re not sure how to define your business, we can.