Thursday, November 30, 2023

Family businesses are welcome winners of the pandemic

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When Covid-19 started tearing Britain apart last year, Richard Balson was ready for it.

His family butcher’s business in Dorset, the town of Bridport dates back to 1515 and has already experienced the plague, with fires, floods, recession and the Napoleonic wars.

“This Covid disease is just another hurdle we’re getting over,” Mr Balson told me recently, when I called into his modest shop to see how it was going.

As it turned out, business was buzzing. At the start of the epidemic, panicked shoppers were spending up to £ 70 per store visit, not the usual £ 10 or £ 20. Many were filling a new freezer, with local sales skyrocketing.

“Some people even put freezers in their rooms before,” he said in surprise, adding that meat wasn’t his only bestseller. Large 56-pound bags of potatoes were coming out of his narrow store door at a rate of over 80 bags a week. “People were afraid of what was going to happen.”

Although its ad sales dipped during the closings, other exchanges made up for it, which was nice to hear.

Family businesses are little known in modern economies, but they are far from trivial and, as the pandemic continues, many point to an intriguing fact that studies have shown for years: These businesses tend to do well in disaster.

After the 2008 financial crisis, British academics found family businesses had consistently lower insolvency rates than other businesses, regardless of size. It’s just as well, considering the number of people who work for them. It is estimated that family businesses represent 85 percent companies around the world. In the UK alone, they employed more than half of private sector workers in 2018, according to Research Foundation of the Institute for Family Businesses.

Conventional wisdom says that businesses controlled by the family, whether they are convenience stores or conglomerates, like marsembody the best of business behavior by thinking long term and focusing on resilience. Like any spectator of Succession know however, they can also be terribly horrible. This fictional television series reflects very real tensions that have long divided some family businesses.

It’s a reminder that these companies can represent both the best and the worst forms of capitalism, says Josh Baron, associate of the BanyanGlobal Family Business Advisory Group.

Banyan investigated family groups during the pandemic and found last year that more than half had a change in family relationships – 26% for better and 32% for worse.

Again, other research shows that family businesses are also more frugal, less prone to flashy acquisitions, more community spirit and even more innovative than other companies. These are admirable qualities in a pandemic – and evident in the Balson butcher business.

Mr. Balson avoided the rampant expansion he saw rival butchers try. “People always ask me, ‘How did you manage to go on for so long? What is your secret? He said. “One of the reasons is that we kept it small. We have always been happy to have a store and to do it right. The balsons are also doing their part for Bridport, offering discounts for NHS workers last year and free home deliveries to lone customers. Family businesses are often accused of being too conservative and clumsy to innovate. But studies show that while they tend to have smaller R&D budgets, they get more innovation for every dollar spent on R&D, in the form of patents, new products, etc.

The invention was a necessity at Balsons. When rationing hit during World War II, Mr Balson said his father turned to “whacon,” or whale meat to corn. His shop now sells products that would have surprised his ancestors, from crocodile steaks to a new sausage released last year to celebrate the family’s 505th birthday.

The 505, as the banger is known, is made with pork, ginger beer and marmalade and sells well.

As Mr. Balson says: “In this game you have to be innovative. We must not be afraid to change. You have to change over time and give people what they want. Enough.


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