The impact of the family component on management and governance of your business is often underestimated, and the ability to remain competitive and continue to build a legacy for future generations can be compromised.
There are seven key areas where the family business component will impact on your decision making. These are: Family and Business Governance, Succession and Next Generation Management, Wealth Preservation and Enhancement, Philanthropy, Exit Strategies, Growth and Assurance.
Over the next few months, we’ll be sharing our insights with you around the topics KPMG member firms see many family businesses tackle through a series of fictional case studies based on the Sages Family Business.
Family Business case studies
The case studies are based around the entrepreneurial development and success of a little grocery store that began in the 1950s and became a significant retail group:
"In 1954, Thomas Sages, aged 30, opened a small grocery shop in his native town. He was passionate about offering quality food at a good price. Because his parents and grandparents owned a farm, he had been able to build good relationships with a network of farmers who could provide fresh fruit and vegetable at competitive rates. Moreover, Thomas paid particular attention to offer good service to his making people always feel welcome and cared for in the shop, and occasionally making the extra effort to deliver the goods to his clients himself. Demand was high. He soon had the opportunity to open a second and then a third shop in other parts of the town. A business was born…”
The challenges and issues of ownership
This family’s story is like an unfolding soap opera. Written by Christine Blondel (INSEAD – Senior Advisor to KPMG on Family Business Intelligence), the case studies enable us to relate to the various challenges the “Issues of Ownership” bring, such as succession:
"All three children started as trainees in stores and worked their way up the ladder. Thomas did not show any favouritism towards them, rather he encouraged a competitive spirit between the three. Fortunately, Caroline and Timothy got along very well, but Charles, the eldest son, was unhappy with his situation…”
Join the Sages family on their business journey
Christine has contributed to several books, articles, and case studies on family business, and is well-placed to explore the unique challenges faced by family-owned businesses, such as the challenge of innovation…
"Thomas was still very active in the key decisions of the business and most employees at times feared and cherished his regular visits to the offices and stores. However, as he grew older he was becoming less prone to encourage risks. He had started to have disagreements with his children who wanted to try new ideas…”
And the challenge of growth…
"Urgent reflection was needed on strategy, and the board of directors was not fulfilling its role. Decisions would have to be taken regarding the best route to international expansion, and the financing required…”
We hope that you’ll enjoy reading about the Sages family and their business, and invite you to join them on their journey by visiting the KPMG Family Business story page.