09/09/2010 - 00:00

Local heads offer family business advice

09/09/2010 - 00:00

Bookmark

Save articles for future reference.

Prominent family businesses have expressed concern over accessing appropriate advice and resources amid providing lessons for commercial success learnt on the frontline.

Local heads offer family business advice

Prominent family businesses have expressed concern over accessing appropriate advice and resources amid providing lessons for commercial success learnt on the frontline.

Various local, national and international bodies offer services to assist family businesses, but Sadleirs Transport executive director and Family Business Australia (WA) chairman Steve Samson suggested family-run operations were either unaware of the help available or unwilling to seek it out.

“I’ve involved myself with FBA as I see there’s this huge risk looming in these companies and they should be accessing good information to help them,” Mr Samson said.

“And the information is there but whether that’s kept secret (or not) is crazy.

“Unless you’re aware of the processes and what is good practice you will fall foul.”

WD Moore & Co managing director Geoff Moore has experienced positive and negative results after utilising external advisers.

He suggested a good adviser was hard to find considering family businesses come in all shapes and sizes, and one solution doesn’t necessarily fit all.

“You tend to be on your own: okay you can be autocratic, you can be an entrepreneur, you can be all these things but you’re on your own,” he said.

“Unless you get some outside help you’re going to stay on your own – in fact you’re not going to learn much from the four walls in which you’re sitting.”

FBA’s educational courses, it’s flagship Family Business Awareness course – supported by the Family Business Directors workshop (and a Family Business Leadership course is coming soon) – and the Australian Institute of Company Directors provide family businesses with various options for help as do suitably qualified independent advisers (some of which are sanctioned by the FBA) and advisers from the big four accounting firms.

Chris Galvin, who jointly runs Galvin Engineering with his older brother Paul, said the siblings completed the two-day FBA and five-day AICD courses, describing the former as dealing with director’s responsibilities and governance while the latter was more intensive, including examinations, case studies and a qualification of sorts.

Mr Galvin also suggested the FBA annual conference (held last weekend in Brisbane) was a useful tool for networking while providing the opportunity to learn from other business owners’ unfortunate mistakes.

“I’ve been to eight of them (annual conferences) and there are always horror stories,” Mr Galvin said.

“They always bring on a few families that have gone down the path of mixing family with business and it’s often a disaster.”

Family businesses looking further afield for assistance have a raft of international options to consider.

Harvard Business School offers an executive education program called ‘Families in Business: from generation to generation’, which explores critical topics such as succession, ownership control, shareholder relationships and healthy family relationships.

In the first week of November, participants willing to fork out $US35,000 for a team of up to four family members can learn how to leverage the strengths of family business management.

Switzerland’s IMD Family Business Center, located in Lausanne, offers a variety of options beyond its ‘Lead the Family Business’ program including customised and integrative experiences.

Attendees at a recent WA Business News boardroom forum were eager to contribute their own ideas and advice to help others involved in family business.

Marsh Civil Engineering Contractors managing director, Phillip Marsh said while external advice was important, especially for the more insular groups, selecting the appropriate forum to have relevant discussions was just as pertinent.

“You’ve got to make sure every time you have a family dinner it doesn’t become a pseudo board meeting, that’s the real danger,” he said.

“You need that forum to talk about the difficult things, and have an agenda, and ask the difficult questions, and the dinner table is not the right forum for it.”

JWH Group managing director, Julian Walter suggested putting together a solid business plan (FBA and AICD even supply templates) that included profit and loss statements, forward budgeting and cash flow was crucial to avoiding future problems.

“That’s where the outside directors or advisers come in and say, ‘Well, you’re kidding yourself’,” Mr Walter said.

Similarly, Leeuwin Estate managing director Denis Horgan said he regularly assessed the company’s monthly cash flow and profit and loss figures.

Coogee Chemical chairman, Gordon Martin said the company always came first in financial matters.

“The worst thing I’ve ever seen in a family setup is when the individual members simply see it as a cash cow,” he explained.

“You have to confront the brutal facts, you can’t just roll on, so just be a realist and confront the facts when they come.”

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options