Interviews

What secrets of survival can the family business model reveal?

6 min read

31 January 2014

Around 60 per cent of SMEs in the UK are family run businesses. Their survival through the generations provides an insight into how to be robust against the pitfalls, trends and downturns of business climate in any given time.

Family run SMEs can effectively operate as an extension of the family and when two or more members of the family are involved then the work culture is most probably a reflection of the family’s home culture and values.

“When it is your name above the door, it is inevitable that the family has an influence on the business, the way it operates and the culture that it has, even more so when the business has been in the hands of the same family for a number of generations,” said Paul Andrews, Managing Director of Family Business United. “In many instances there are examples of generations of families being employed by the same family business like, for example, at Deakin and Francis who are known for manufacturing the world’s finest cufflinks in Birmingham, and have been doing so for over 200 years. Others like Pimlico Plumbers have a culture whereby the normal retirement age has been waived in cases of longstanding, loyal employees and it is not uncommon for family firms to see their employees as extensions of their own families.” 

Nurturing, valuing and empowering those around you might be true of a well-functioning family in the same way as a well-functioning business. Take for instance, Bistech who specialise in business networks and communications, based in Ferndown, in Dorset. Jocelyn Brown is the Managing Director of the firm and her father, Mike Hancock is the founder of the business. They have been established since 1988. 

The company has recently doubled its office space and is recruiting heavily, such is its success but that aggressive recruitment is built on a solid foundation of retained and valued staff. They perceive the on-going development of their staff and retention of staff, as the vital driver for this success. 

“Our average employee has been with us for around eight years or more and that speaks for itself,” said Brown.

From an employee’s point of view, if you work full time then the chances are you spend more time with your work colleagues than your immediate family, so the relationships and values you develop at work are arguably akin to a surrogate family – so it’s an advantage to enjoy their company!

A family run tiling business that has evolved from one tiny multi-floor Bristol building in 1908 to showrooms in Bristol, Portsmouth, Gloucester and Southampton today, is Collinson Tiles. They have shown that you need to keep the customer close, give them a quality service and have direct open communication with them.

“We noticed and responded to changes and trends quickly because we have always made sure we have open dialogue with our customers and listen to them. If someone calls or emails us with questions or requests we don’t pass them onto a sales team, we just chat to them about what they want and deal with it there and then. We call our service ‘one and done’ – why should a customer be passed on from pillar to post?”

The culture of the typical family run business has a unique outlook, perhaps because of that sense of permanence a family unit has.

“Family businesses tend to have very different values at their core compared to their non-family counterparts, although they remain commercial in every way, and have to in order to evolve and survive going forward.  They hold a long term view and are able to look at the broader picture, not just in terms of the business but the day to day staffing matters too,” explains Paul Andrews. “Open and honest communication is at the heart of many with the managing generation having a clear, open door policy and encouraging involvement and participation from everyone.  There is often a level of respect that is not seen in other organisations too, and there is research to back up the fact that family firms are more trusted and their staff are more loyal.

“All of this combines to provide an environment that whilst commercial, engenders a workplace that is like an extension of the family, the business is like ‘another child’ and the family hold the business and staff that work for them in a manner that creates a unique and exciting culture too.”

Of course, family businesses present a friendly PR front, they are personal rather than cold corporate. They understand their customers rather than have to learn them. They are part of the community itself, rather than an outside influence. Arguably all of these lessons boil down to one – the oldest lesson in business of all – that businesses are basically about people. When this is understood, all the rest can often fall into place.

Richard Forsyth works for website marketing company Varn Media

Thank you to Jocelyn Brown at Bistech that provide business networks, fixed and mobile voice, data and video communications, Jane Hudson at Collinson Tiles and Paul Andrews from Family Business United for their contributions to this feature.