Family spirit helping businesses through, research shows
Being able to depend on relatives to get the job done is helping family businesses through the recession, according to research by a leading business advisory firm.
A poll of family business owners, conducted by Moore and Smalley Chartered Accountants and Business Advisors, found that over 65 per cent thought the sense of camaraderie and loyalty gained by having family members as colleagues gave them an advantage over other firms.
However, the research also found that running a family business during a recession was also putting strain on some individuals because the emotional attachment made some decisions, such as making redundancies among family members, difficult and stressful.
Ginni Cooper, a director at Moore and Smalley and head of the firm’s family business team, said the recession had magnified the complexities involved in running a family business.
She said: “Family businesses are unique; they have inimitable strengths, as well as problems, that require a strategy that differs from other businesses.
“For example, family businesses offer a number of benefits that are hard to cultivate in other companies, such as greater trust between staff and stronger commitment to the success of the business. In times of hardship family members will rally round and offer support and financial sacrifices.”
“However, this closeness also means there can be additional emotional stress on family businesses, particularly when it comes to things like having to tell a family member you have to making them redundant. The issues of pay and benefits, disciplinary procedures, managing conflict and inheritance can also create conflict.
“Despite this, it’s great to see that on the whole, family businesses have come into their own during the downturn.”
According to the Institute of Family Business, family-run businesses make up 65 per cent of the 4.6million private sector firms on the UK. They are essential to the economy and are found across firms of all firm sizes; from micro level to SMEs to large private firms.