A distinctive business culture has affected how three family businesses have navigated the pandemic.
Perth family businesses have been dealt vastly different hands by the economic upheaval resulting from the COVID-19 lockdown, but three spoken to by Business News believe their culture gives them strength in responding to the crisis.
For Linneys creative director Justin Linney, the family business culture is reflected in engagement with staff.
“You want to be a reliable and strong base,” Mr Linney told Business News.
“When your name is on the door… it makes you more accountable.”
Mr Linney said small-to-medium enterprises and family businesses generally had a close connection with staff, with more personal engagement and knowledge about their circumstances.
The retail industry has been particularly hard hit by the pandemic and consequent drop in consumer confidence.
Employment in the sector has fallen 6.6 per cent in Western Australia.
Mr Linney said it was a priority for him and his brothers, Troy and Nathan, who jointly run the 48-year-old business, to make sure all staff remained on the books.
But the business was not immune to impacts of COVID-19, with its Crown Perth showroom forced to close when the hotel and casino complex shut its doors.
The jewellery maker had been operating from its Subiaco headquarters in recent weeks, Mr Linney said. “The decision to close Crown showroom was really made for us,” he said.
“[And] we kept trading at our King Street showroom as long as we could.
“Once everything went into full lockdown, there were no office workers in the city, we made a decision to temporarily close that.
“We’re glad we were able to trade, obviously in a different capacity.”
For about eight weeks, Linneys has been split into two teams to minimise the potential for infection to spread.
That means shifts of one week on and one week off, with everyone in the business having hours reduced, including management, Mr Linney said.
“As a retailer we were between a rock and a hard place,” he said.
Employment was also supported by the federal government’s JobKeeper wage subsidy.
However, recent moves to embrace online trading have helped cushion the blow, Mr Linney said.
Many consumers now made decisions about where to shop based on what they saw online, he said.
“Luckily we’d done a complete overhaul of the website pretty recently with an e-commerce platform,” Mr Linney said.
“We’ve always had a minimal amount featured online, to stop designs being copied.
“We’ve increased from 100 to over 1,000 [pieces].
“People think if you don’t have it online, you don’t have it at all.”
Mr Linney is confident sales will rebound.
“It’s important to be cautious and aware of what’s happening, but not contractionary, that’s dangerous,” he said.
“Brand awareness needs to be there.
“Relationships and love, all those things don’t stop.”
Families first
Filter Supplies sales manager Jeff Ash said the second-generation family business had acted early to prepare for the economic impact of the pandemic, which he said reflected a different approach to risk.
Mr Ash told Business News the company, which had been operating for 53 years, had purchased three months of stock in advance from suppliers and filled the warehouse by mid-March.
That prepared Filter Supplies for disruptions in its supply chain.
“The advantage to being a family business [of our size] is we’re not always constrained by a set of parameters a multinational would be under,” Mr Ash said.
“The decision to stock up was a natural one, we’ve done that before.
“As a general rule, family businesses are more comfortable with risk.
“Opening your own business is not a decision made with all risks known.
“We’re more able to move quickly than other businesses.”
Mr Ash said most of Filter Supplies’ customers were in mining or oil and gas, where demand was still strong.
Having warehouses full of filters had been useful for the business because many competitors had not stocked up in advance and were suffering issues in their supply chains, he said.
Like Linneys, Mr Ash also split his workforce into two teams.
Outside the office, Mr Ash is chairman of Family Business Australia’s WA branch.
He said collaboration through the organisation’s forums had been helpful in recent months, and particularly praised Small Business Minister Michaelia Cash, whom he said had been very consultative about the impact of the pandemic on family businesses.
Civil contractor Dowsing Group’s executive director, Bohdan Dowsing, said the business, which employed about 120 people in WA, was agile because it was family owned.
There was less bureaucracy and it could react more quickly to the market, he said. A focus on diversification had also helped, with the business still receiving a steady flow of work from local government contracts and Main Roads WA.
“What’s beautiful about being a family business is we don’t have other shareholders to report to,” Mr Dowsing said.
“We can take the long view.”
The business has also been dealing with a recent acquisition of a Sydney contractor as part of a plan to spread nationally.
Succession
One of the toughest questions for family businesses is planning how to transition leadership over generations.
Filter Supplies, Dowsing Group and Linneys are all second-generation family businesses, with some level of involvement from the founders.
Mr Dowsing’s parents handed over the reins about two years ago, and he runs the business with support from chief financial officer Paul Coates.
At Filter Supplies, Mr Ash said his parents still visited the Welshpool warehouse on weekends when other staff were not around, to limit the possibility of virus spreading.
Mr Linney said he had worked for 12 years at Linneys before taking his leadership role at the business.
“It feels like quite a long apprenticeship, as with anyone working at a family business,” he said.
“I’ve been keeping busy trying to get the structure sorted.”
Responsibility for running the business is spread between Mr Linney and his two brothers, with external advice also sought on occasion.
Mr Linney’s father, Alan, works in an operational role and was still active, he said.
