We recently attended a webinar held by Robert Powell and Kirsten Taylor-Martin at Grant Thornton. They spoke to specific attributes of family business brands that aid them during uncertain times and economic downturns.
Here are the top 5:
Harvard Business Review has done a study that shows family businesses carry 23% less debt. The Australian government also found that family businesses weathered the GFC better than non-family business. Family businesses are robust, giving them a stronger starting point in difficult times.
They can push through change quickly and basically make s@#t happen. Scenic World is an incredible example of this. With both parts of their business; the Bridge Climb and the Blue Mountains being shut down by the government due to COVID-19, they quickly reviewed their offerings, from experience based to a tangible product; the business started to sell and deliver stock from their store room to the local Blue Mountains community. This was less about money making and more about ensuring as many of their team could be retained as possible.
The majority of family businesses have a Macgyver (so says Robert Powell). Essentially what he was saying is that family businesses have someone who has been there long term. They know the ins and outs of their business, what systems were used when and for what — so if something breaks they know how to fix it and are happy to wear a lot of different hats in their role. Those people are gold. As a family business ourself we have two such people in Tiny Hunter and we thank our lucky stars for them everyday.
Harvard Business Review also found that family businesses have 20% less turnover in staff. And for those staff, financial incentive does not correlate with retention. They did find, however, that family businesses spend a whopping 260% more on people investment, which would explain the retention. During uncertain times and economic downturn, staff loyalty is key.
Stakeholder relationships tend to be much stronger, so when you are looking to negotiate terms or payment plans this becomes an easier conversation — an essential piece of the toolkit during this ever-evolving economic climate.
Whether you run a family business or not, these are important factors to learn from and nurture within your own business.
With thanks again to Robert Powell and Kirsten Taylor-Martin for the webinar.