The statement that a business is family run is often laid out without relevant context and ultimately what it actually means for a company to be able to trace its heritage back to a family with the same surname. On the surface, the idea of family generally rubs off on the company with traditions of creating trustworthy partnerships and promoting sustainability at the heart of the company ethos. What this means for customers is being able to work with a supplier which is committed to giving you a quality service, where the product you receive matches exactly what you need it for.
One major difference between family-run businesses and privately owned companies is the aims and objectives of both. Private organisations which are run by an elaborate chain of command which ultimately listen to the word of shareholders, will in general focus on short term gains such as profit margins. While this is great in theory, companies such as these do not show growth, instead profits are received by the shareholders without significant further investment in infrastructure of the company to further promote sales.
Alternatively, family-owned businesses work on a long term strategy which ultimately focuses on 10 to 20 years down the line when incumbent family members prepare to take over at the top of the hierarchy. Rather than the family consuming the profits, they are instead re-invested in the company to encourage growth in the years to come. This emphasises growth in premises, staff as well as innovation to ensure sustained growth.
A defining feature of this investment is the retention of labour which can be found in family-run businesses. Rather than aiming to retain staff on a financial basis, they instead create strong company cultures by promoting from within and investing in training for staff. As a result, employees are encouraged to remain with the company with the prospect of personal growth. This provides significant advantages in the long term as staff have extensive experience in the inner workings of the company, meaning that customer service is often exceptional due to the detailed knowledge held by employees.
This long term model is often reaffirmed by a family-run business’s commitment to support local communities around which they are based. Private companies are generally driven by the need to boost sales through aggressive advertising, whereas for family-owned companies, the emphasis is centred around creating a reputation in the local community. This is built upon the foundation of quality service where they can be contacted directly by customers who can identify exactly what they need and can work closely with the company to acquire this.
The basis for success amongst family-owned businesses is built upon the foundations of continual improvement with the long term prosperity of the family at heart. This is tempered with passion, professionalism and a strict assessment of their impact in the local as well as wider impact in the community. It is companies that manage to strike this balance which show consistent success, during both the good times and the bad. Being able to create a business which is reputable in the community for quality products and services as well as giving back to those who are employed by the company and have completed business with them, has been the keystone for the success of family-owned businesses for centuries.