You must be aware of some well known companies like Volkswagen, Walmart, BMW Group, Reliance Industries, Tata Group, Aditya Birla Group, Godrej Group. Do you know what they all have in common? They are all family-owned businesses. All of these and so many other family businesses have reached heights of success. On the other hand, there have also been many family businesses that have gone under. The reasons may include unresolved internal disputes, poor financial planning, inadequate succession arrangements and many more.
We are here to tell you that if managed correctly with expert external counsel, every family business can scale the heights of growth and reach the top. But before we show you the rhyme and reason behind the statement, let us tell you why we advocate family businesses.
Advantages of Family Business
- Familiar Values
Growing up with the same set of values and ethos, it is easier to adapt to the working style of a family business. The heritage and the quality of the business is intact as all members work on the same wavelength.
- Authenticity and Trust
Being known as a family-owned business, a sense of trust is built among the customers. This is due to the authenticity that the business displays while conducting the activities.
The members of a family business look for the business’s growth and the family’s needs too. In case of unforeseen challenges in the business, the owners would be more likely to let go of their financial gains to keep the business afloat.
Let us look at a few examples of family-owned businesses that have been growing in leaps and bounds over the years.
- Tata Group – Owned by Tata Family
With a collective revenue of $103bn in 2021-22, Tata Group of Companies is one of India’s largest and oldest family-owned businesses.
2. Reliance Industries – Owned by Ambani Family
With an estimated wealth of $93.97bn, Reliance Industries is another big name in India’s largest family-owned businesses.
3. Walmart – Owned by Walton Family
A global departmental store chain, with an estimated value of $238.2bn, is also a family-owned business.
Many more names, including Chanel, Volkswagen, Ford, and many more adorn the list of successful family-owned businesses.
Mantraa’s Family Business Advisory
Just as every coin has two sides, certain pitfalls come along with the territory of a family business. These pitfalls may include disputes among family members, succession battles, financial planning issues to name a few.
A classic example of mismanagement and lack of planning that led to internal disputes and finally a demerger of a family business is Reliance Industries. After Mr. Dhirubhai Ambani, feuds sparked between the brothers due to lack of succession or estate planning. This resulted in a bitter parting in the company and the relationship as well.
Being a family business, you might have various concerns. Well, we as your business advisors, are ready with solutions to all of your challenges. If there is a business dispute, we are ready to assist you with dispute resolution. Or you may have concerns regarding the financial health or the future profitability of the company. We provide services like internal audit, performance management, capital restructuring and investment planning to bolster your business’s growth.
Read here how we helped Power Band, one of India’s largest family-owned adhesive tape manufacturers, by understanding their strengths and guiding them on their merger with Intertape Polymer, a US/Canadian listed Company.
With a team of experts with over 30 years of experience, we are equipped to provide you with an effective solution to every problem that your family business may face. So rest assured, whatever your concerns are, you are sure to find a solution with us at Mantraa!