Bev Johnson Partner, KPMG Enterprise Chair, National Family Business Committee

The competitive advantage of a family business

Does your family understand the advantages and challenges of being a business family?

What are the unique resources your business family has because of the impact of “family”? What are the constraints or difficulties you face because you are a business family? Do your advantages outweigh your constraints? Have you actually analyzed the advantages and challenges you have because you are a business family? Have you capitalized on those advantages and minimized the constraints?

According to UBC Sauder School of Business, Canadian family businesses contribute to 60% of the country’s gross domestic product, and according to the Richard Ivey School of Business, Canadian family businesses employ 50% of the country’s workforce. While it was previously said that 70% of family businesses will not make it to the 2^nd generation and 90% won’t make it to the 3^rd, research shows that family businesses have more chance to survive than non-family corporations.

Further competitive advantages of a family business include the access to labour and capital by the sheer contribution of family members, building a strongly knit bond as they are financially vested and employed by the company. The workplace culture and environment is also different from a non-family corporate setting in the sense that the family values and relationships are carried through and shared with all employees – family and non-family members. Finally, on succession, a family business is a great platform and spring board for the next generation family members to aspire to the ownership of the business and the continuation of a legacy.

So ask yourself: Does your current structure allow your business to grow and change? Does your leadership in fact lead and is a team in place for the future? Do you have the ability to create long term wealth for the family?

Building on the family advantages you have and minimizing any family constraints, you will indeed prove the fact that business families do have a competitive advantage.

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Recommended Reading

Plan Ahead to Help Ensure Your Business Survives Future Generations
By Laurie Bissonette. Article originally published in Northern Ontario Business, April 2011 issue. Read more

Consider Implementing Family Meetings for Your Business Family
By Laurie Bissonette. Article originally published in Northern Ontario Business, August 2011 issue. Read more

Business Adviser is published by KPMG Enterprise™ specifically for owners and executives of private companies. KPMG Enterprise is devoted exclusively to helping business owners and entrepreneurs build thriving enterprises. For further information about how KPMG Enterprise can help private companies, visit kpmg.ca/enterprise.