A family business is hard to define and the definitional vagueness that exists does not help (Upton, Vinton, Seaman, & Moore, 1993). Logically, one common denominator is that for a business to be considered a family business there must be a level of family involvement. Within research, there is a distinction between the type of family involvement, namely between ownership and management (Handler, 1989). This helps operationalise research as a distinction is possible between, family-owned but not family-managed, family-owned and family-managed, family-managed and not family-owned businesses. However, it does not distinguish two family enterprises with the same level of involvement, when one firm wants to be recognised as a family business, and the other denies being a family-run enterprise. That said, the uniqueness of a family business lies in the pattern of ownership, governance, management, and succession of the business. These inevitably influence the organisation’s goals, strategies, structure, and the manner in which each of these are formulated, designed, and implemented. The study of family businesses is interesting because the family component shapes the business in a very particular way which is not found in other non-family organisations (Lansberg, 1983). Family businesses therefore require a different consulting approach than other firms, and this is something that we recognise fully at Equinox.
According to European Family Businesses (EFB), a lobby group, family businesses make up more than 60 % of all European companies, accounting for about 40 % to 50 % of employment in Europe at any one point in time. The majority of family-owned businesses are SMEs, the preponderance of which are micro enterprises employing less than 10 people. They are of vital importance and are considered to be the major driving force behind the European economy. It is for these reasons that they play a central role in the European Union’s 2020 growth strategy.
Yet, from our experience, there are countless problems that torment family-owned businesses specifically. The statistics speak for themselves: only 44% make it to the second generation and an even slimmer 24% to the third. Perhaps this pressing reality is what causes such businesses to engage external expertise in the first place. A recent survey demonstrates that 64% of family businesses (66% in Malta) have non-family members on the board in order to mitigate the problems that beset family businesses, particularly those of continuity and succession. In fact, succession planning has been on top of the most pressing problems for family businesses along with staff recruitment, cash-flow problems and company restructuring.
In view of the realities that family business face and their uniqueness as a business structure, at Equinox Advisory, we have developed advisory services specifically dedicated to family businesses. We have had the opportunity to work with enterprising families to develop comprehensive strategies that has enabled them to grow and to work harmoniously together as owner, family-members and managers. We offer a highly-dedicated service supported by our expertise in business consultancy, family dynamics, taxation, conflict management, accountancy, auditing and commercial law. We understand what it is like to manage the inherent conflicts and challenges of a family business: the difficulty the owners experience when planning the distribution of wealth among family members; deciding on what strategy one should adopt in order to ensure that all family members feel fairly treated; Deciding on whether to sell the business and if so at which point in time; and how to ensure business continuity. These may be among some of the most demanding questions that family-owners pose to themselves and that the business in its entirety questions and seeks to answer. Whatever the situation, we ensure taking the necessary time to understand your concerns and your business, the dynamics that shape your family, and the interest and needs of all relevant stakeholders in order to help you make sound and informed decisions.