29 Aug 2017
Smorgon: the key to successful family succession
Brendan Rinaldi |
Only open and honest communication will work when it comes to succession in family business, PwC exec says.
1 Dec 2017
Six tips on family business (from award-winning family businesses)
Many of us can attest to the stress of dealing with the day to day demands of work. But for the countless Australians operating family owned businesses, there’s the added weight of attempting to manage family cohesiveness, supportiveness and loyalty.
Family-owned businesses account for around 70 per cent of all Australian businesses and Family Business Australia (FBA) CEO Greg Griffith believes they deserve greater recognition for their contributions to Australia’s community and culture.
“Most family businesses are Australian-owned and at a grassroots level provide investment, workplaces and employment which make our cities and towns thrive,” he says.
“There are half a million family businesses nationwide, so it’s fair to say a healthy family business sector equals a healthy economy.”
Family businesses are diverse – they come in all sizes, operate in all industries and have a range of operating structures.
" Most family businesses are Australian-owned and at a grassroots level provide investment, workplaces and employment which make our cities and towns thrive.” - FBA CEO Greg Griffith
According to FBA, they are often risk averse, have flexible decision making, a greater commitment to retaining staff and higher labour productivity than non-family firms.
It’s not often people like this are recognised for their tireless work and entrepreneurial spirit.
At the recent FBA Victorian Hall of Fame awards, two of Victoria’s pioneering family-owned businesses, Kyvalley Dairy Group and Luv-a-Duck, were commended for contributions to their local economies and communities.
Both businesses share in the trials and tribulations of running a family-owned business.
Kyvalley
Kyvalley Dairy Group is one of Australia’s largest family-owned dairy operations with a history dating back to 1857. Today the company is the largest bulk fresh pasteurised chilled milk supplier into South East Asia including Malaysia and Singapore and also exports fresh milk to China, one of the largest fresh, pasteurised, drinking milk markets in Asia.
Despite its success, the company’s current fifth-generation owners, brothers Peter, David and Wayne Mulcahy, have weathered droughts, floods, the deregulation of Australia’s dairy industry and the global financial crisis.
“Like the majority of businesses we have faced a range of challenges over the years but through the continuous review and revision of our business models, we’ve been able to adapt our business quickly,” said Wayne Mulcahy.
“Most importantly, we were united in our vision and used our collective abilities to work through the challenges together.”
Family business advice, from award winners
Wayne Mulcahy, Kyvalley Dairy Group
- Seek professional advice to develop ideas into a business plan. Ideally, find a business mentor to coach you particularly in the first few years.
- Ensure you have or can hire the different skill sets needed to run the business.
- Ensure have access to sufficient capital to start and run the business. It usually costs a lot more than you plan for.
Theresa Sfetkidis, Luv-a-Duck
- Communicate regularly, openly and honestly with all family members and discuss succession.
- Build a family culture within the company by encouraging respect and empathy and importantly celebrate the achievements and milestones.
- Employ people who are experts in their field and manage them well using the management method DSTIR: Define, Select, Train, Inspect and Respond.
Luv-a-Duck
Melbourne-headquartered Luv-a-Duck is owned and operated by sisters Theresa Sfetkidis and Kim Shoppee-Lynch whose late father Art Shoppee started the company in his backyard in Nhill in 1969.
The company has transformed itself many times since its early beginnings and today produces around 5.2 million ducks annually and exports to Asia and the Pacific Islands.
Both sisters are involved in overseeing all aspects of business management including operations, sales, marketing and farm management and innovation has been vital to the evolution of Luv-a-Duck according to Executive Chairman, Theresa Sfetkidis.
“My father spent considerable time in the 1970s travelling the world to determine the best ways to produce duck across all elements of the supply chain,” she says. “We’ve focused a lot of our research and development on our manufacturing operations and more recently on the customer experience.
“This has meant that today we have an automated world-class manufacturing facility and consumers who are more appreciative of our product which we’ve achieved through consumer education and innovations in our packaging leading to improved product quality and shelf-life.”
Lesson or two
Although family-owned businesses face their own unique challenges and opportunities, it’s clear they provide a lesson or two for all organisations on how to build a successful and sustainable company.
Their agility, self-reflection and culture, might just hold the key to unlocking the potential of Australian businesses of all shapes and sizes.
Gareth Arbuthnot is State Manager Business Banking Vic/Tas at ANZ
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
editor's picks
06 Jan 2016
How to prepare for succession in a family business
Mike Norfolk |
Spending a lifetime on a business, especially one you have established, built up and successfully run is an enormous achievement. It takes passion, commitment and resilience. So it is understandable when the time comes to step away it is a life-changing experience.