Keeping it in the family pays off
An impressive 78% of these businesses in SA reported growth over the past 12 months, PwC survey reveals
Blood is once again proving to be thicker than water as the SA family business sector pushes to continue on the path of quick and aggressive growth over the next five years.
The Family Business Survey for 2016/2017, recently released by PwC, says about 78% of SA family businesses reported growth over the past 12 months, and 62% expect to grow steadily over the next five years.
The survey, which included 2,802 interviews with global family businesses, says 82% of family businesses look after their staff better.
Globally, 64% of family businesses grew, while 20% shrank.
This is while 78% of SA family businesses have seen sales growth over the last year and 10% have seen a reduction in sales.
Eben Gerber, of Running Waters in Theescombe, Port Elizabeth, said his family had been operating the wedding venue and conference centre for seven years, but as a whole the family had been working side by side for 20 years.
He said the key benefit of running a family business was sharing in each other’s success.
“We share a common goal to be successful and to grow.
“We share values and more so value one another for each individual’s role.”
The family has so far hosted more than 1,000 functions and events at the venue.
“We’ve grown enough to add decor hire to the business as well,” Gerber said.
Vasco De Andrade, cofounder of PE Propshafts in North End and Buffalo Propshafts in East London, said hard work and keeping debtfree were critical to the success of the two businesses.
Both businesses are run by De Andrade, his wife Liza and their children.
“We have the luxury of taking the profits made out of the business, but we rather plough it into the children and give them what is due to them.
“Each child has a designated job, one focusing on stock, the other on financing, while the others are technical.
“So everything is split up, and no-one interferes with the other,” De Andrade said.
According to the PwC survey, respondents in SA feel they have some advantages over non-family businesses.
More than 80% think family businesses have a stronger culture and values, faster decisionmaking and are more streamlined and entrepreneurial.
De Andrade said for his family the major benefit was being able to manage their own time.
“You work for yourself and you can prepare for your children’s future.
“What you put into the business is what you are going to get out. Our time is flexible and if the children need days off, they get the days off.
“The succession plan is there already, so once my wife and I step back and downscale, the children will carry on.”
Darushka Williams worked for her father at Mayibuye Fishing in Korsten as a school pupil at weekends and later in telesales.
She said working in a family business had enabled her to learn the tricks of the trade under her father, who encouraged her to always work harder.
“He was always just more understanding.
“I learnt how to be the hardest worker in the room because your family depends on you to get the job done.”
Ismail Limalia and his eldest daughter took over the Caltex Unity Motors service station on Cape Road in April 2017.
Limalia said there was no one better to depend on than one’s own family.
“We work as a team and we look out for one another.”
However, he said running a family business did not come without challenges.
“Fortunately my daughter and I have a great working relationship, but if you have a business-related disagreement it automatically carries home.
“When we celebrate Eid it’s a challenge because you want all your family to have time off, but you can’t.
“And if there is some sort of emergency with family members in Durban, it becomes a problem because we can’t all leave the business.”
PwC’s leader for entrepreneurial and private business in Africa, Andries Brink, said family businesses were still lacking when it came to succession planning.
“Too many family businesses are still approaching the matter of succession as a oneoff event rather than a longterm process,” Brink said.
“Although many family businesses surveyed have some sort of succession plan (35%), only 17% have a formal succession plan that has been discussed and documented.
“More worrying, this figure has not risen significantly in recent years.”
The report says 22% plan to sell or float their businesses.
Driver for economic growth
The Family Business Survey for 2016/2017, recently released by PwC, reveals that the family business model has proved to be a driver for growth in the South African economy.
PwC’s leader for entrepreneurial and private business in Africa, Andries Brink, said this survey was the largest and most comprehensive that PwC had run so far.
“It covers more companies locally and globally than any of our previous surveys,” he said.
“Senior executives from more than 2,800 family businesses in more than 50 countries have taken part, of whom 130 were from South Africa, representing sectors as diverse as agriculture, retail and manufacturing.”
The survey’s key findings on SA family businesses are:
● 78% have seen sales growth over the last year, while 10% have seen a reduction in sales;
● Globally, 64% of family businesses grew, while 20% shrank;
● 69% of South Africans will use their own capital to help fund further growth;
● 80% of SA family businesses surveyed have at least one procedure/mechanism in place to deal with family conflict. The global figure is 82%;
● 17% in SA had documented and communicated succession plans, compared with 15% globally;
● 22% plan to sell or float their businesses;
● Short-term challenges include market conditions, government policy/regulation, exchange rates and staff recruitment; and
● Long-term challenges in the next five years are cost containment, corruption, innovation and the need to make their business more professional...