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SA’s family businesses are too often overlooked


Family businesses are South Australia’s quiet achievers – and they deserve more government support to help them grow and evolve, writes Andrea Michaels.

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There’s no doubt South Australia punches above its weight when it comes to homegrown, successful family businesses. Coopers, Haighs, RM Williams and Rossi Boots are all hero companies that started right here and took their products to the world.

But how much thought do we really give to the contribution made by family business in our state?

Research has shown many owners feel overlooked by both the community and government, who fail to recognise their achievements.

Far from being a small, disparate group, the family business sector makes a huge contribution both in terms of employment and finances. According to statistics from Family Business Australia (2012), 70 per cent of Australia’s 2.1 million businesses are family-owned, delivering around $4.3 trillion to the economy.

Family businesses also have a strong track record of retaining staff and enriching the local community. Several research reports have noted higher-than-average levels of productivity.

But the sector is also facing some unique challenges.

Help needed with succession planning

With around 80 per cent of family business owners intending to retire in the next 10 years, working out how to continue the legacy can be hard.

These businesses often have personal and business wealth tightly intertwined. Making plans to exit – either by passing the company on to a family successor or by sale to an outside party – is important if years of hard work are to be realised.

Many struggle to manage this transition and, more often than not, conversations are started too late. Sadly, some businesses may fail at this stage and never achieve their true potential.

And yet there’s little assistance given to help family businesses in this area.

At present, there are no government programs to provide specific support or advice around succession planning or structuring the family business for the years ahead.  And there’s no targeted grant scheme to assist with the process to ensure jobs are retained.

Family businesses also want red tape reduction. Although there’s a federal Small Business and Family Enterprise Ombudsman, perhaps the Small Business Minister in our state and federal parliaments should have a family business focus as well – because small business and family business are not always the same thing.

While there’s a lot of time spent courting big business and multinationals with offers of special concessions to help them stay in South Australia, or to locate here, we need to also help family businesses who are already invested in the state and here to stay.

‘Innovation nation’ includes family business

There’s been a lot of fanfare from the Turnbull Government around our innovation nation. Yet adapting to change and taking up new technology is what many family businesses really need to expand. So why aren’t we putting effort into that right here, right now?

Perhaps the Government fails to realise the size and impact of many family businesses in Australia.

Quiet achievers such as 2014 Farmer of the Year and fourth-generation Lenswood apple farmer Robert Green have been going about their business quietly for years without asking for help.

Robert is sought-after both nationally and internationally for his work on sustainable farming and development of several new varieties of apples that have helped to expand new markets for South Australian fruit.

He’s also a director at Lenswood Cold Stores Co-operative Society (trading as Lenswood Apples), another great Adelaide Hills family business initiative which started in 1933. The Co-op helps local grower families come together to pool resources and marketing might.

Together, they’ve developed new export markets and alliances that sees them responsible for 70 per cent of the state’s apple crops – that’s 10 per cent of Australia’s total production.  The Co-op now turns over more than $45 million each year and has 75 employees.

And it’s no old-fashioned outfit, either. More than $5.5 million has been invested this year in a state-of-the-art packing line that makes it one of the most advanced in Australia. It will allow production to scale up and to launch into new export markets over the coming years, generating even more return for local growers, the community and our state.

It’s time to think about supporting the family business sector better in South Australia.

Other companies may come and go, but this sector is here to stay. We should be offering more tailored support to help them grow and evolve over the next 10 years so we can have even more SA hero businesses to pass on to future generations.

Now that would be a truly great legacy.

Andrea Michaels is a family business specialist, tax lawyer and the managing director of Adelaide firm NDA Law. She is also chairman of Family Business Australia’s SA Adviser Subcommittee.

National Family Business Day is celebrated annually on September 19.

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