Mark Kippenberger, KPMG Business Advisory Partner says NZ's family businesses have kept a cool head and weathered the economic downturn better than their big-business counterparts:
Family businesses in New Zealand are by no means a recent phenomenon. New Zealand's business landscape is extensively populated with a variety of strongfamily businesses which have been successfully managed for a long time. Many of them also seem to have navigated their way through the current recession with remarkable skill.
Their success is partly attributed to a combination of conservative policy, highly motivated workforce and customer loyalty.
Conservative policy at heart
Family owned businesses are unaffected by the short term aspirations and expectations of big brand players owned by public shareholders. This empowers directors with a much wider dividend policy and an ability to take a longer term view on price, service and subsequent trading performance.
Further it means owners can look past the 'efficient gearing ratio' equation to a debt / equity level they feel comfortable with. That emotional response often overrides business logic.
Home grown culture
As owners of privately owned businesses closely work alongside their team members' everyday there is often a higher sense of loyalty to their employees. Business problems are often shared and solved together.
The loyalty and understanding arising from this close working relationship helps to further entrench employee commitment to the cause. They too are in for the long haul.
Earned Loyalty
The selling process is part science and part art. Successful family business owners know providing excellent service for repeat customers is as vital as the need to break into new markets.
Given their long-term profit view, a locally owned business can focus on the customer experience before considering the underlying profit made on each transaction. This means the customer feels served and cared for as part of the experience and consequently rewards the 'local guy' with repeat business.
So while privately owned NZ business may not have the sheer capacity of the big players dominating most markets, they manage their affairs in such a way as to inspire commitment from team members and customers alike.
