Family businesses have been around since old Mr. Jones from down the road crossed the cobbles every morning with his sons in tow to run the town butcher shop and they’re still as prevalent today, it seems. However, new research has revealed that the identity of the traditional family business is going through a period of evolution and it’s all down to the changes in today’s society and modern family life.
The changing face of family business
A major survey carried out by Families in Business (FiB), which is an organisation that dedicates itself to supporting family firms, has shown that a rise in divorce and re-marriage is causing this shift in status. Due to the increase in relationship reconfiguration, there are more and more step and adopted children joining family firms, creating a more multi-generational structure than has ever been seen before.
FiB’s findings showed that nearly half of family businesses now have two generations of employee working within them, while 18% have three and 2% have five. It is also interesting to note that the average age of a family business CEO is 60, in comparison to the 54 years of age in non-family owned companies.
Dani Saveker, founder and CEO of FiB, said: “The survey has gather information on how family businesses are planning for the future and next generation through succession planning, shareholder agreements and access to finance, but also how they are prioritising investing in future opportunities and innovation, whether through R&D, people, training, skills or talent.”
However, what FiB found in their investigations of the “future-proofing” measures family firms are currently taking was less than encouraging. A shocking 48% admit that their business would be left in a vulnerable position should something happen to key members of the firm. This is precisely why communication is so important for a family business (or any business at that matter) but a worrying 74% still cite a lack of communication as a main problem.
Famous family forces to be reckoned with
Mainstream media and figures in the public eye are often hugely influential in the behaviour of us mere mortals so we’ve shone the light on some famous family-run empires that aspiring entrepreneurs can learn a lesson or two from. These ambitious blood-bound teams prove that with the right structure, excellent management and strong communication, family firms can be a real triumph.
The Beckhams – The London School of Marketing has this week published new research that reveals how the Beckham brand is now worth an impressive £500m and it has got the star-studded family behind the name to thank for the half-a-billion-pound price tag. The lucrative unit can be broken down into three main arms: David’s work in the football industry, Victoria’s £6om fashion business and the array of wider endorsements that they and their four children are involved in.
Last year the Beckhams’ second-born, Romeo secured himself a leading role in Burberry’s winter marketing campaign and reportedly earned a whopping £45,000 for one day’s work on set. The deal, which set him amongst the highest earning models in the world at the time, was enabled by Simon Fuller, former band manager of the Spice Girls, who shot Victoria to fame during the nineties.
This is a classic example of taking advantage of connections, which is an important business tactic the Beckhams are clearly passing down to their offspring. David and Victoria’s collaboration on an Emporio Armani underwear campaign in celebration of their 10th wedding anniversary also shows that they’ve got the balance between business and pleasure just right, which is another great lesson in entrepreneurialism that their children and any other aspiring business owner can learn from.
The Kardashians – The multi-billion Jenner-Kardashian empire was built on unconventional foundations when the infamous Kim Kardashian was exposed in a scandalous sex tape and went on to attend as many Paris Hilton parties as it took to get her name up in lights. But no matter how unorthodox these beginnings might be, you can’t knock her ability to build advantageous connections and network herself to brand success. She currently has an annual personal income of around $28m thanks to the various ventures she has been able to fund through her atypical networking and is one of the most successful business women in the world right now.
Kim has taken her personal rise to fame and used it to build a family empire that has fast become an internationally recognised brand through the various strengths of her four siblings and the management and leadership skills of their mother, Kris Jenner. Kris proves that in for any business to work, there needs to be efficient team management tactics in place to ensure that you are always running a tight ship and each individual member is singing off the same hymn sheet.
Read more about why you, as a business owner need to be more like the Kardashians here, including Kylie Jenner’s flare for social media attention and viral brand exposure.
The Smiths – No we aren’t referring the 1980’s rock band fronted by Morrissey, we’re talking about Hollywood hotshot family, Will Smith, Jada Pinkett Smith and their three children, Trey, Jaden and Willow. Ordinary by surname but extraordinary by nature, the Smiths are yet another A-list unit that prove that with all the right elements, a family firm can be a highly successful business venture.
Will and Jada are both affluent actors who are no strangers to the silver screen and in an interview with American TV star, Oprah accredited their success to the “marriage business plan” the established early on in their matrimony. Jada explained that “if you don’t have a purpose for your relationship […] you can really get lost in the murk of the journey” and the same ethos can be applied to business partnerships as well as personal relationships.
When discussing his children’s part in the Smith family business, Will said, “I tell them all the time: ‘mommy and daddy are rich. You are all broke’”, which might look like tough love to outsiders but is team motivation in action to successful business owners. It all seems to be working well as Willow made her first acting appearance alongside her father in 2007 for popular blockbuster, I Am Legend and has already released two hit singles after signing to Jay-Z’s prestigious record label, Roc Nation. This has bagged her a net worth of about $4m already, which is more than can be said for most of us before we even hit our 15th birthdays.
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We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!