Another factor adding pressure to small local family run businesses is the emergence of online shopping and services. Mark O’Mahony, director of policy at Chambers Ireland accepts that “as an increasing number of services are provided online and remotely by operators, locally focused businesses can find themselves squeezed by competition from outside their region, or even outside the country”. He says the onus is on family owned business to respond to these challenges proactively.
“Those businesses that continue to thrive and indeed that have established during the recession, differentiate themselves in the marketplace by offering exceptional customer service at a local level” – Patricia Callan, Small Firms Association
McCarthy accepts e-commerce has added pressure on family run businesses in terms of price competition for imported goods, with Irish consumers able to source the same produce cheaper overseas. But he believes that shopping on the net “has helped family businesses which have embraced it. The investment is significant to get the website right but it can have huge payoffs for the firm. It allows for international trade and an inherent scalability for those that have a unique produce such as crafted goods [like] pottery, glass, and jewellery”.
A lot of family owned businesses are taking advantage of online service providers, he adds, such as restaurants and takeaways that use Just Eat. “It means they don’t have to make the capital investment but benefit from broader business as customers can place their order on the Web,” McCarthy says.
Callan says online service can be a threat but she has met “several IT sales and support providers who are successful in regional towns, because many people still prefer to deal with someone local, who is conveniently located close to them, who they relate to personally and who they can rely on to give them expert advice and solve their problems in a timely manner”.
She suggests that people are “still willing to pay a premium for this expert advice, exceptional customer service and local know-how, versus just going online. I think there is also a strong sense of supporting family businesses in the local community, but this is something that must be developed further by strategic Government focus on the redevelopment of regional town-centres”.
As a relatively new industry, the IT sector is unlikely to have many family-run businesses that have gone through a generation or two. Callan believes that many IT family businesses “are mainly first generation businesses, but most businesses that set up by definition are family businesses, as many husbands/wives/siblings, etc. help out, at least at the start”.
Standards
Michael Conway, director at Renaissance, estimates that there are quite a few family run businesses in the IT sector. He outlines a scenario where one person with engineering skills teams up with someone with sales skills and then they employ husbands or wives as they progress. “In smaller partners, you very often find family members,” he says. The bulk are in companies with five or less employees.”
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