I recently attended two family business forums, in Riyadh and Al Khobar, Saudi Arabia. At these events, many of the big issues faced by family businesses were discussed, such as succession, governance and the separation of management and ownership.
But I was struck by a common theme throughout many of the round table discussions: namely, the challenges that face family businesses in the Middle East. These challenges are not unique to the region, but they are more prevalent than in other regions.
Family businesses underpin Turkey’s strong economic growth. That’s in part because family businesses — big and small — account for more than three-quarters of all economic activity in the country.
You may think that the trusting, tight-knit nature of family-owned businesses means they have a lower risk of fraud. But some experts believe the risk and occurrence of misappropriation are actually greater in family businesses due in part to that very environment of trust. Furthering the problem, the perpetrator may not realize his or her behavior is inappropriate.
In the future, how will families finance their businesses? And how might new sources of finance affect the structure of family businesses?
I ask these questions because I know of many businesses that are looking to expand outside of their home markets but lack the resources to do so.
Where can they find the money they need in order to expand?
Can former communist economies develop strong family business sectors? So far, there is no clear answer. In some ex-Soviet countries, there appears to be a strong dynastic will, or desire to pass a business on down the generations, among entrepreneurs, but in others this is less apparent.
Historically, Russia has been a place where money can be earned rapidly and entrepreneurs enjoy a lot of opportunities. Nevertheless, most of these entrepreneurs are focused on building their businesses and do not think about succession. Continue reading
Peter Englisch, Global Leader of EY’s Family Business Center of Excellence, opens the first EY Family Business Summit.
The first EY Global Family Business Summit took place in Monte Carlo two weeks ago, during EY’s World Entrepreneur Of The Year event. Held over two days, the summit gathered together family business leaders from 17 countries, and provided a great opportunity for discussing some of the most crucial issues currently facing family-owned businesses.
John Perkins was 12 years old when his parents, Doug and Mary (now Dame Mary), launched Specsavers from their Guernsey home in 1984.
Even as a boy, Perkins played his part in the family business. He spent his formative years driving up and down the UK looking for potential store locations with his parents and remembers calling to get sales figures from individual stores at the age of 14.