There are many benefits to running and working within a family business. The family unit lends itself to a more supportive framework in which to grow your business, even in today’s harsh, recessive world.
One of the reasons why a great number of family-run businesses have survived the financial crisis, while other establishments have suffered, is that all members of a family business are bound by more than just commercial interst. Their core fundamental entrepreneurial values, such as commitment and loyalty, are bolstered by their family ties, which improves stability and adds consistency through these uncertain times.
Another great advantage of working in a family business is the trust issue. When you work with family members, people you have grown up with, know well and are emotionally bonded to, there is a huge amount of mutual trust - far more than you would find in non-blood-related businesses.
This level of trust and reassurance, which is unique to family businesses, is crucial to taking a long-term view in business. Conversely, family-run businesses can also have more confidence in short-term risk-taking, for the same reason. They are trusted to take the plunge.
All team members in a family-run business know that they all have a long-term commitment to the company. They all want to achieve great things for each other and work towards joint goals for the business. It's an absence of selfishness and a movement towards democratic enterprise. Family members aren't just out to improve their own careers and reach personal goals.
Research has also shown that entrepreneurs who work in a family business environment are much more focused on growing their businesses. The focus on family and teamwork within the business helps them to really identify with their customers. Family businesses are often brilliant at adding that personal touch to marketing and communications. Customers are also more likely to be loyal to a family business: they get to know and trust the team over a long period of time, rather than dealing with ever-changing individuals in a regular company.
Family-run businesses also possess the requisite flexibility to quickly adapt to uncertain circumstances and a fast-changing economy. This gives them a sustainable competitive edge. Let me explain... People working for a family business have a far better understanding of each other’s strengths and weaknesses, which give them the edge in making quicker and better informed decisions compared to other corporations. Furthermore, many family-run businesses are not tied to corporate governance and other similar structures which can affect flexibility.
While working alongside and running a business with your family members has many merits, there are also certain disadvantages that can spell doom for the enterprise. One problem that family businesses often face is the lack of inspiration and fresh perspective when you work with the same team members for a long period of time. Also factors such as personal egos, difference of opinions and individual selfishness can hinder the company’s growth.
Challenges aside, the positive aspects of working within a family business outweigh the negative. I should know, I work in one. Running a family business has definitely enhanced Topsgrup's survival capabilities and sets us apart from other enterprises.
Global chairman of Topsgrup Securities, Dr Diwan Rahul Nanda, took over his family business at the age of 22, and converted it from a loss-making enterprise to a £150m-turnover company.