Generations of families are behind some of the world’s largest businesses, like Walmart, BMW and Mars. They lead the way in many countries, making up over 85% of private sector businesses in the UK, 67% of companies in Australia, and 87% of American companies are family-owned or controlled. And, while most family-run companies don’t have the extreme drama of the Roys, found in HBO’s Succession, there can be huge benefits from working with your relatives.
A better understanding of personalities and ways of working, a greater sense of loyalty and more determination to make the business successful, are just some of the driving factors behind their dominance. Though these attributes aren’t a given, we’ve seen this in plenty of the family-run businesses we’ve backed. Here, we’ve taken a deep dive into the areas in which they shine.
Providing an area of expertise and building a solid brand reputation
Building a skillset that makes you stand out from the crowd is an excellent foundation for a business – and when you have decades of expertise carried on through generations, you can establish a legacy. Family-run businesses have lasted many years build a brand reputation by keeping specialist knowledge alive in the family. The association of a family with a company has also been proven to build trust with a customer base, which is invaluable for retention.
OakNorth customer Europa Wools is an example of a family legacy that has thrived from generation to generation. David and Lynn Morsley, started the business in 1988, trading raw wool internationally between Britain, Australia and New Zealand. The company passed to the next generation with their son, Richard Morsely, who committed to carrying on its legacy into the future.
“Since my parents founded Europa Wools over three decades ago, we’ve strived to build a business that knows everything there is to know about every kind of textile fibre available. This includes where to source materials at the most competitive price, anticipating customer demand, and ensuring we stock the required range of fibres to meet every order.”
Our £2.1m loan supported the management buyout when his sister Gina wished to exit the business. This allowed Richard to focus on his direction for the company, which included expanding into a retail offering.
Letting passion shine through
Family ties to a business can come with associations of love and care for each other and the product. And if you show you genuinely care about the product, this can entice more customers.
This was true for bunnyhomes, the SME home creator and brainchild of Tracey Kent, whose passion drove her to start the business. A serial entrepreneur, Tracey took the experience she had gained from acquisitions from over 40 years in business and applied it to new-build property developments for rental and sale. She started with one joint investment with her brother. Now, they’ve both gone on together to build beautiful homes that put eudemonia at the centre of everything.
Our £6.2m business loan was used to fund the building of a new development in the village of Kilkhampton. Now, bunnyhomes has created multiple new neighbourhoods around Devon and Cornwall, investing £20m in the local economy along the way. Tracy said about the partnership:
“We have historically been a self-funded business as we’d heard from our peers that the borrowing experience at banks can often be challenging. However, working with the team at OakNorth Bank was a genuinely delightful experience, they were highly communicative and understand the business we’re building.”
Using experience to act upon a gap in the industry
When starting a new business in an established industry, you may wonder how to make your business stand out. If you and your family decide to go into business together, your previous work experience can help build your new brand identity. And if you can use this to service a gap in the industry, that’s where your business can take off.
Capital Developments Group is a family business that was started in 2020. Father and son Colin and Jordon Foux began their new venture with over 40 years of experience in the industry already behind them. They then took their skills to focus on acquiring residential and commercial property across London and the Home Counties. Their acquisitions have taken complex property projects and given them a new lease of life, such as converting a former petrol filling station into nine flats in central Oxford.