National survey seeks to reveal the super glue that holds family businesses together

A national survey is seeking to understand the hidden effect of "familiness" on family-owned businesses.

Lead researcher, Dr Linda Glassop, from Deakin University's School of Management and Marketing, said familiness was equivalent to a super glue, it was an invisible bond which kept the family business together, yet little was understood about how it operated or its impact on the business.

Graeme Matthews KPMG's National Managing Partner, Middle Market Advisory, said that going to the next level of understanding family business needs was critical to on-going support of this sector.

Dr Glassop said approximately 79,300 family businesses ceased trading every year having an impact on Australia's economy as well as the family.

"Up until now past research into family businesses has focused on understanding the practical side of the family business for instance succession planning, the use of professional business practices," Dr Glassop said.

"Yet no-one has measured familiness, let alone determined the degree to which it impacts on a firm's performance and longevity.

"This year's survey will try to do this."

Dr Glassop said involvement of the family in business meant more than the business being owned by a family or having its members as participants.

"The effect of family extends across all areas of the business," she said. Family members for instance have goals and aspirations, what effect does this have? "Likewise they bring various relationships and networks to the business, as well as skills and time.

Dr Glassop said if being a family business really mattered then the effect of family involvement would be apparent in some way.

"It might be that increased business performance is the likely outcome of family involvement, but it may be that the family members are in the business for more reasons than money. Unless we can measure the relationship between family involvement, familiness and firm performance we cannot argue that having a special emphasis on family business really matters.

The national survey is being sponsored by KPMG with support from Family Business Australia. The results of the research will be presented at FBA's national conference in Cairns in August.