Fascinatingly, on a long-term basis, family businesses globally outperform others according to a recent study by Credit Suisse. What’s interesting is that this applies wherever in the world you are, and whichever sector you work in. Taking the longer term view, family businesses survive and thrive.
This is particularly interesting when we look at the UK market. In the UK there are 4.8 million family businesses. This represents a staggering two-thirds of all UK businesses.
What we can learn from the report
It’s when it comes to profitability and growth that family run businesses truly excel, according the Credit Suisse report. However, it’s vital to understand this with a long-term perspective. Looking in to the facts and figures of the study, it is the nature of family businesses to have a more conservative stance. This is reflected in their ability to grow and thrive through trickier economic times.
Furthermore, a typical family run business is less likely to rely on lending or debt funding than a non-family run business.
Fundamentally, family run businesses take the long view. They aren’t in it for the fast buck. Instead they want sustained profitability for many years.
Running a Family Business
Of course, family run businesses aren’t always plain sailing. But knowing that they rest on a solid bedrock for success is a valuable thing to understand.
One thing that stands out time and again when it comes to successful family businesses is a strong family-centred ethos. These ‘family values’ translate into successful business principles. They are often pivotal to the business branding. Principles such as honesty, integrity, quality and pride all play their part. Furthermore, the key players are ‘schooled’ in these principles and have a vested stake in their success, which doesn’t allow room for complacency.
The Work-Life Balance Conundrum
However, a tricky subject for many family run businesses is striking a sensible and healthy work-life balance. With strongly vested interests, and boundaries which are easily blurred, it’s difficult for family business employees and family members to ascertain an appropriate balance of work and family life.
We are adept at enforcing and applying boundaries in the professional realm, but when we’re working with family members this becomes harder. Therefore, the boundaries need to be more consciously put in place. Work needs to be work, and home needs to be home. If these boundaries aren’t struck, then both relationships and the business can be damaged.
The danger of looking inwards
Additionally, and within the context of striking a work-life balance, family businesses are at greater risk of stifled innovation because of an inward looking approach. Innovation is often sparked from external sources and so this should be intentionally sought out.
Part of this is bringing other employees in to the family dynamic. Both parties need each other’s attributes and skills. Understanding this is vital. Ultimately, as a family business grows it becomes more of a ‘business family’ and this ethos will stand it in good stead to grow. It’s also the very conservatism that the Credit Suisse study realises is an essential element of success.
What do you think of family businesses? Do you run a successful one? Please share your thoughts below.