July 19, 2011 - Anonymous
Small family-firms have the competitive edge over their rivals due to their agility, personal approach and loyalty to staff, a report by private bank Coutts has claimed.
The results were drawn from a Coutts survey of 300 family firms – classified as a husband-wife team or siblings, but not where family members worked together on a part-time basis.
Particular strengths found among family firms were their honesty and integrity in business affairs. Good HR practices, such as loyalty to staff, as well as a sense of brand image, were also identified as strong points.
Juliette Johnson, head of family business at Coutts, said the findings went some way to explain why some family businesses survived over many generations. “Having values such as honesty and integrity helps family businesses maintain long-term, stable relationships, both internally and externally,” she said.
Forum of Private Business spokesman Chris Gorman said that around 10 per cent of FPB members were family-run businesses, with business owners typically in partnership with their spouses or siblings.
He added that the results of the survey were unsurprising as family firms could be robust in many ways, but warned there could be pitfalls involved in working with close relatives.
“People can get lulled into a false sense of security if they’re working with family, thinking that nothing can go wrong, but that’s not always realistic,” said Gorman. “If there’s a dispute, for instance, it can get very difficult and messy to resolve differences with family members.
“For that reason, we always advise people going into business with family to get legal agreements drawn up over issues like copyright and ownership,” he added.
It was also important to consider what would happen in the event of a death, said Gorman. “It’s not something you want to think about, but if your husband or wife died, sorting out complicated business affairs would be the last thing you would want to have to do,” he said.