It’s not unusual to be faced with the choice of a small family business and a large corporate when it comes to working with a supplier or service provider. Who should get your custom – and why?
Deciding who should get the job isn’t always easy or obvious. There are pros and cons to both options, but one thing is for sure: you don’t want to compromise on cost, quality or after-sales support.
Why a family-owned business can be your best bet
According to KPMG’s 2021 Australian Family Business Survey, family businesses in Australia represent 67% of all Australian businesses and they provide 55% of private sector employment.*
Clearly, family businesses play a major role in the economy and in society so let’s look at some of the reasons driving their success.
What makes a family business successful?
When the majority of ownership in a company is held by family members, the team is likely to be committed to a collective goal. After all, the business is their livelihood. They can’t just throw in the towel and get another job, so they’re likely to be highly motivated to do the best job possible for the good of the business.
Keeping things ‘in the family’ means customers are more likely to benefit from:
- Greater levels of public trust. Because customers get to see and meet the people who actually own the business, it makes for stronger personal relationships and a greater sense of trustworthiness.
- Higher levels of customer-service. Because the owners have a vested interest in the business and have a personal reputation to uphold, they’re more likely to put a strong focus on their customer service levels. They’ll take time to get to know their customers and invest in long-term relationships.
- Approachability. It can be easier to discuss your unique needs or circumstances with a smaller business, as opposed to dealing with a large faceless corporation. In many instances, bookings or enquiries are taken by team members who aren’t even in the same state as you, which can make it difficult for them to truly understand your requirements.
- Competitive pricing. While large corporates can benefit from economies of scale, this doesn’t always translate into lower costs for the customer. A small company is just as likely to be able to offer competitive pricing and discounts as a result of their personal relationships with local suppliers.
- Expertise, skills and know-how passed down the generations. A family business is often multigenerational, which means customers benefit from the experience, expertise, skills and insider knowledge which has been passed down the line. Yes, big companies may have substantial training budgets, but nothing beats first-hand learning on the job from an experienced professional.
- Community minded business. A family business is likely to operate in a niche market or local area, and is likely to have established a long-term connection to the local community. When a person supports a local business, by extension they are often supporting a local charity or community initiative.
- Owners take responsibility. The success and sustainability of a family-owned business lies in the hands of a small number of people, so everyone in the company has to give 100% all of the time. There’s nowhere to hide! The owners will take responsibility for the service they provide to customers and the value they deliver, so they will be fully committed to making sure it’s the best it can be.
Keeping it in the family
This is a general assessment of the benefits of doing business with a smaller, family-owned entity as opposed to dealing with a large corporate, and there are obviously advantages and disadvantages on both sides. That said, we know family-owned businesses play a significant role in the economy and so there must be good reasons for their success. Why don’t you put it to the test?