FAMILY RUN BUSINESSES

There are huge advantages associated with family businesses and their sustainability for a long run. The advantages are that business profits and losses are shared and the family takes responsibility of the business rather than giving responsibility to a single individual. 

There are other key advantages that includes focus on a sustainable long term profitability versus the short term results. Long term profitability helps in the smooth running of the show and how to handle the risks effectively. The corporate culture is strong and is driven by family values associated with emotions of success. These values includes considerably the values of the founding member and are in terms of entrepreneurship, vision, work, ethics, commitment to communities in which they are involved, personal relationships with the stakeholders, loyalty and a huge concern for reputation. The last thing i.e. reputation always matters immensely in family businesses as reputation holds vital strategies of growth and developments. 

 A huge example of successful family businesses is the Loblaw companies that are one of the 43 large companies in Canada. Over the last 13 years it showed a return rate of 206% that’s a huge margin from 2005 to 2018 i.e. far ahead of 133% return in the past year. 

A similar study shows results for the family run businesses that were about 9% on an annualized basis that is compared to 6.7% for the S&P TSX composite total return index. Established companies that are family businesses according to bank analysis are a huge advantage for the Canadian economy and its boom.  Every economic life cycle is dependent on company performances and company analysis. The company analysis is based on results since it was formed and started performing in terms of profits and other numbers.

Courtesy: MBE Blog