The challenge for the types of operations that start up with a local computer shop or a local IT service is in working out how to charge people to tidy up a PC, for example. “How do they make money out of what they provide?,” Conway asks. “They have to grow to a sensible critical mass and have some good customers as well.”
Conway believes that “there is a real opportunity” for small family run businesses in the IT sector but argues “they need to be difficult and arrogant about it”. The opportunity is presented by the fact there are many small businesses scattered around the counties and towns of Ireland and they are “out on a limb, so they have to find somebody local to deliver stuff, put in a cable or set up their wireless. They need a local computer partner type guy”.
But small IT shops will struggle to support lots of different types of products and implementations. Conway says they need to standardise and convince their customers to do so too. “Where it works really effectively is if they say “this is what I sell – this printer, this server, this laptop and this PC. If you want something different, that’s fine, but don’t come back to me about it”. That way they always know what they’re going into.”
“In smaller partners, you very often find family members. The bulk are in companies with five or less employees” – Michael Conway, Renaissance
In other words, he thinks small family run IT businesses have the greatest chance of success by running “a very vanilla business and keeping it relatively straightforward and simple. Otherwise they could end up trying to support ten or 20 different things”.
A significant issue facing all family run organisations is that they observe business and family governance. McCarthy says this is “of paramount importance when it comes to ensuring the success of the family business over the long run”. Which means that even if they are hiring a wife, husband or brother, they make sure “due process is undergone for anyone joining the firm, whether they are a family member or an outsider. Everyone must bring a clear skill set to the business so that their value is evident to all”.
It’s also imperative that companies avoid the perception of favouritism for family members. “Everyone must be treated equally and all perks must be earned by the work carried out by the individual, he adds. Successful family firms have clear roles of responsibility and reporting structures. If everyone knows what their role is and who they answer to, the business runs more smoothly.
McCarthy stresses that it’s also important that all employees can share in a vision for the future of the company. “If family members and other employees alike can see a role for themselves in the future success of the company, they are more likely to demonstrate loyalty and stay committed to their role,” he remarks.
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