Multigenerational family businesses could become a thing of the past, with a staggering number of owners deciding not to pass on the business to their children or anyone else within their family.
Jeffries Printing owner Baden Kirgan told My Business that despite working in his family’s company since the age of five, he has no intentions of handing the ropes over to his children.
His involvement with the business is similar to the experience of many others:
“My mother and father had purchased the business in 1978, and we had always as kids worked in the business,” said Mr Kirgan.
“When I finished university, I started working in the business [full-time] then, and was here for five years before dad retired.”
But disruption and technological change have left printing a “declining industry”, Mr Kirgan said, and for this reason, he wants his children to move into other industries that have a more certain future.
“When I took it over, the kind of printing we were doing back then only had five years left in it, if that,” he explains.
“What used to be 70 per cent of our business is now a fraction of a per cent of our business. But what we did is move into different markets and different kinds of printing.
“Printing as a whole is a declining industry… in 20 years’ time, there will still be printers around, but it will be a very different kind of industry to what it is now. It will be very high-tech, paper might not be a huge part of it.”
Mr Kirgan added: “I could hand it over to my kids today and it’s a profitable business and they could run it no problems, but in 15 years’ time, I want them to still have a career and be able to grow in their jobs. I’d rather them train as something else rather than have the idea they can fall into a family business that is going to be there for their working life.”
1 in 4 businesses to lose family links
A spokesperson for Family Business Australia declined to comment on the issue, and instead referred to a joint report produced in May this year by KPMG Enterprise and the University of Adelaide titled Family business – the balance for success.
According to the report, 8 per cent of family businesses are actively planning to sell out, while 29 per cent haven’t given a thought to how they while transition out of the business.
Of those that do have a plan in place, the report found that one in four (24 per cent) businesses will no longer be family-owned once their current leader(s) decide to move on, and will instead be sold or simply shut down.
It did note, however, that the bulk (63 per cent) still intend to retain family ownership, although this may not explicitly involve their children.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.