According to Andrew Wates, third-generation former chairman of Wates Family Holdings, "No market stays the same forever, markets change and you have to be able to change with them." As a member of the evaluation committee for the Coutts Prize for Family Business this is something that he is bearing in mind as the judging process gets under way.
And there is no denying that, for many sectors and industries, the markets have changed significantly over the last year. The question for family businesses is how they can best adapt to the changing climate. "When you look for successful businesses it is those businesses that can adapt that will be the most successful," Wates continued. "I think one of the dangers of the family business is you keep on doing what you have always done and that is not always the right way to go. You have got to keep the entrepreneurial flame alive in a family business."
This is not always an easy task but it is something that will set successful family businesses aside and it is a quality Wates is looking for. "Keeping a really close eye on the market, adapting accordingly and looking for new opportunities are all very important. As is getting the next generation involved and supporting them if they want to start something, with due rigour of course."
Being entrepreneurial does not always mean expanding outside of the sector within which the business already operates. "Entrepreneurialism doesn't have to be something new, it can be developing something within your existing business area, the important thing is keeping that spirit alive," explained Wates.
An entrepreneurial spirit must be coupled with other, more traditional family business values for families moving forward out of the recession.
Jonathan Hagger, chairman of the South East Regional committee for the Coutts prize, said: "Having a long-term view is what sets family businesses apart. Because they are managing for the long term they are not damaging their business by cutting to make short term profits."
However, this will not afford them unlimited protection to market fluctuations and unexpected difficulties. "They are in business like everyone else. They need to be sensible, trim costs and stay as profitable as they can with an eye to not damaging their long term profits," he said.
This eye on stability does not only serve to protect the family wealth and business for the next generations, it actually serves as a stabilising influence in the economy, according to Wates. "When you look at the patient capital, entrepreneurialism and low leverage that often characterises family businesses, this does afford them a certain level of security and in times of stress like this it can be a stabilising influence on the economy as a whole if you have a bedrock of family businesses," he said.
Hagger spent over 20 years working for the Duke of Westminster's family business and so understands that fluctuations in the market are inevitable and must be considered when looking for this year's winner of the Coutts prize. "One doesn't have to have a blemish free record, even the best of businesses are having a tough time of it, I think that one has to set it in the context of where we are economically," he said.
This does not mean though that a struggling or failing business can walk away with the award. "You need to have a profitable business because if the business is not profitable you can talk about so many of the surrounding features until the cows come home but it doesn't mean anything, the business needs to be financially successful," he explained.
With the nominations period for the award now to a closed, finding businesses that are succeeding despite the tough trading conditions has not been a problem for the committee. They have already had more applications than in previous years and Wates believes the quality is increasing too. "I have been sitting on this panel for three or four years and the rigour is getting better and better. I think this will result in better and better winners," he concluded.