Advantages of the family business model

My father and I were both accidental entrepreneurs. Our Datar family didn’t have a business legacy. All our forefathers had been salaried employees. None of them sought a different career path as they were content with their jobs. My father was the first person in our family who switched over to a business career in his retirement age. He sensed a business opportunity and dared to step into an unknown field. In my case, I was reluctant to enter the business field. I was looking for a simple job in any overseas country, which would pay me a handsome salary, but destiny brought me into entrepreneurship, and I eventually became a shopkeeper.

We deliberately adopted the family business model for our enterprise, and of course, it has benefitted us a lot. There was a reason behind it. When my father successfully ran his little shop and earned a sizeable profit, he expanded the business. He offered a partnership to an unknown trader to fulfil the working capital. The person later broke the agreement and tried to take over our business. This breach of trust shocked my father, and he decided to remain the sole proprietor forever. I went a step ahead and brought my entire family into our business.

The main advantage of the family business model is you get trustworthy partners, and your business secrets or product formulae can be kept safe from your competitors. Second, when you engage your family members in your business, the risk of losing it to outsiders gets minimised. Also, the profit is shared only among family members. I have observed that hundreds of family businesses have been running successfully for generations.

But before bringing family members into the business, you should ensure that they are interested in it, and the challenge is to develop a liking for business among them. Forcing a decision on family members can sometimes turn into disappointment. I have seen an example of it. I knew a doctor couple who were running a small hospital. They had an only child. Whenever the kid use to visit the hospital, the father wouldn’t allow him to play there or touch anything. He would shout at the child and order him to play outside. He intended to protect the child from playing with sharp medical instruments like injection needles, scalpels and scissors. The fault was in his speaking style. Otherwise, he could have convinced the child in a friendly and smiling manner. But that didn’t happen. Slowly, the little boy began hating the medical profession, the hospital campus, and its atmosphere. Later, when he grew up, he opted for another career. The father insisted on him applying for medical education, but he refused. It was a disappointment for the father.

Forget the business aspect. When the family is beside you, the emotional bonding, mutual trust and self-confidence remain intact, and the quote ‘Together we win’ proves it.

Dr Dhananjay (Jay) Datar is the chairman and managing director of Al Adil Trading.