business and there is intent to keep the business in the family. Family business focus on expanding their ownership level, succession and developing the business. Family business can be small firm owned by entrepreneurs or private firms. Family business are different from public companies as they do not funds by share but instead by families or friends or other family members. The size, age, profitability and experiences define if the family business belong to the private or public sectors.
Family business raise funds differently than public firms. They do not find capital using the shareholders' equity or stock market as they are very private about their family secrets, illusive and closed environments. Thus investors or shareholders have problem getting inside of the family business.
The capital source of family business are loans from friends or family or other informal ways. External source can be given depending the maturity of the business.
Based on my perspective, family business doesn't have any problem on getting funds to raise capital for their firm or profit. It is because there are a lots of family business company are very successful and produced profits. For example River Island that is a private company and still owned by the Lewis Family. This business has grown from just nine stores to 70 stores in 1985 and now over 300 stores in the UK, Republic of Ireland, Russia, Netherlands, Poland, Belgium, Middle East, Ukraise, Georgia, Armenia and Singapore. It's website has successfully ships goods to over 100 countries worldwide. River Island is one of the great examples of a private, family business and successful companies worldwide.
The birth of River Island is that the Lewis family formed the Lewis Trust Groups which one of the family member run the hotels, property and investment business while Bernard (the founder) in charge of the retail operations. Thanks to the source of funds and finance the business got from other type of business the family owned. The company able to expand into menswear in 1982 and then finally merged with Chelsea Girl to become one retail that focus on mens and women clothes under the brand name of River Island in 1988. In 2010, the introduced kids-wear.
As you can see from the examples above, family business proved not having difficulty finding funds to grow their business. They don't have to find financial sources only externally such as banks loans or wait the business to be mature. The family members provide the financial source by giving loans or support the business. It can be said that getting loans from family is less risky than banks.
i take a view that family business's success is not only because of fund and is also about the ownership of family business. because most family business are owned by the founder and they tend to make long-term strategy to avoid risk. If is possible, presenting more evidence about why they success could be better
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