Family businesses “well-positioned” to ride out economic downturn
A new report has given further backing to the family business model suggesting that privately-owned family businesses have leadership values and particular characteristics which may position them well to ride out the economic downturn.
In particular, family businesses are less likely to thrive on risk and to enjoy "making money" compared to non-family businesses say the authors of "Family Business: In Safe Hands?", which surveyed 300 family businesses from all over the world.
Only 10% of survey respondents said that they have or would consider selling their business, compared with 22% of non-family business owners who were questioned.
The report, published by Barclays Wealth and the Economist Intelligence Unit, also identified the strong support network from family members and the values and ethos shared between family members as the two most important advantages of being a family business.
"Businesses can often be forced into knee-jerk reactions when faced with a challenging and unfamiliar environment, but this can sometimes exacerbate problems. A longer term view, less debt and an experienced management team are just a few of the factors which provide stability and minimise vulnerability in testing times," said Mark Kibblewhite, managing director of Barclays Wealth.
The report also suggests that family businesses will play a key role in community support during the downturn as a majority (55%) cited their most important motivation as the ability to help others compared to non-family businesses. Consequently, family businesses are less likely to make redundancies, seeking other cost-saving measures such as reducing salaries and suspending dividends instead.
