A clear vision often plays a crucial role in a successful business. In Hong Kong, many firms started out as small family enterprises, but with a great vision. Nevertheless, ensuring continuous growth of a family enterprise requires clear-cut strategies and successors who are professionally trained in modern business practices.
First generation entrepreneurs are the foundation of family businesses because they are visionaries, according to Kanishka Bedi, assistant professor at U21 Global, a Singapore-based institution offering online graduate business programmes.
While family businesses exist across sectors, they are largely represented in industries such as retail, pharmaceutical, hospitality, manufacturing and restaurants. 'Hong Kong has seen a lot of successful family-owned restaurants and their own recipes appeal to the local market,' Professor Bedi said. 'You can also find family owned businesses in the manufacturing sector who produce small parts and components and supply them to major corporations.'
While family members may have invested their time and money to start the business, Professor Bedi said that what made a company stand out was the vision by the first generation entrepreneurs. They would have ensured it was operated by other members of the family who shared the same vision and passion with the founder on a daily basis. Another important aspect that ensured success of a business, Professor Bedi said, was a succession plan that made sure of a smooth transfer of the business to the next generation.
He said Asian family businesses, especially those in Chinese culture, showed a strong bonding among family members. 'Unlike owners of companies in the west, who may wait for the right time to sell their business for a big profit, Asian owners tend to pass on their [firms] from one generation to the next,' he said. Often the next generation worked for the best interests of the company and they would have a strong attachment to the business.
Another reason why family businesses can flourish in Asia, according to Professor Bedi, is that the policy in most countries in the region has been developed to ensure the growth of local enterprises, which are fundamental to the long-term economic development of the whole nation.
From the business development view, the first generation entrepreneurs of a family business may have started with good ideas about developing a new product or creating a new market, but their lack of professional training in business and management represents a challenge to sustaining the growth of the company.
