Borana Hima, Senior Advisory Manager at Francis J Vassallo and Associates (FJVA), has a soft spot for the family businesses she assists on a daily basis. Possibly, they remind her of the grit and determination her own family had for business, back in post-Communist Albania in the early 90s.
“My father is a bit of a role model for me. His determination to provide for his family meant that he took every opportunity possible to grow the family business. His drive still inspires me today,” says Borana, reminiscing of her childhood.
Graduating in law from the University of Turin, and later specialising with an MBA, Dr Hima moved to Malta in 2015, and joined a mid-tier service provider, but she was soon drawn towards the values and forward-thinking culture of Francis J Vassallo and Associates.
“I see a lot of myself in FJVA. Though a family business itself, the firm is not afraid to change and stay up to date with new practices, always offering an updated and relevant service to businesses. Furthermore, at a time when core principles and sound values are of paramount importance, especially in an industry that is built on trust, the firm makes it a point to stay steadfast in its principles and provide trustworthy guidance to its clients.”
Family business form an important segment in Malta’s economic landscape and are a growing cohort which require specific and specialised assistance as they often encounter very particular situations other businesses may not necessarily ever come across.
“In our day to day, we often help family businesses find solutions to issues that may require specialised attention. Few family members decide to enter a business venture together. Most of the time, and most family businesses, are the result of a successful enterprise being inherited by a number of siblings or a set of cousins,” Dr Hima notes. “With every generation that passes, and this is very well studied and documented even at a global level, the issues and challenges are often expounded.”
Family businesses operate in a very complex environment and often need to contend with an extra layer of difficulty which other businesses might not need to factor into their equation.
“We cannot downplay the matter of familiarity which sometimes offers its own challenges for a healthy business. Family businesses in fact often face issues of personal difficulties which are brought in to work, complicating matters,” Dr Hima explains.
Succession is also a major hurdle for family businesses. The process of passing on the reigns of a business to the next generation can be bumpy at best.
“Transitioning to the next generation can offer its own challenges, since the people who may have created the business from the ground up, may not be as willing to let go of their brainchild. On the other hand, the upcoming generation, while often all too eager to prove themselves, may lack the experience to take on the task,” Dr Hima expounds.
“We experience a great deal of generational conflict especially when a clear vision for the business is missing. Sometimes the older generation will not be too keen in taking certain opportunities as they will regard them as too risky. The younger generation will consequentially feel limited in their possibilities, creating tension. That is why it is crucial to understand the pain-points of every family business, going into a certain detail, to be in a better position to assist them.”
Having worked with such businesses for decades, FJVA offers specialised assistance to family-owned companies, seen as a growing area of interest for the firm.
“For me, the first and most important thing when dealing with family businesses is to sit down and really understand where they are coming from. It is a two-way exchange where I learn about their history, strengths and challenges, while they get to know me and how I can help them. Trust is crucial at this juncture, since it will determine whether the relationship will actually develop into growth and success,” Dr Hima notes.
“Once we have a solid foundation we can build on, we start working on ensuring that family businesses have a sound business model and corporate structure that serves their needs best. Often family businesses are so focused on what they do best,overseeing their day to day operation, that they seldom have the time to dedicate to such matters. As they grow over the years, having the correct structures in place will only become more and more important.”
Asked what advice she has for family businesses, Dr Hima says that strategic action should be top of the list.
“There has never been a greater need for strategic thinking! Family businesses need to really understand the landscape they are operating in, and what the market is telling them. Just because a business has done something in a certain way for a number of years, it doesn’t mean that they should continue doing it. Businesses should stop, analyse what is around them and be proactive in their strategy.”
Courage to seek advice also plays an important part, according to Dr Hima. “Don’t be scared to seek advice – there is a lot of help out there that can make a great deal of difference. The commercial cost of looking the other way, may cost the company even more dearly in the long run!”
“Ultimately, we are in the business of helping family-owned companies make the right choices. We see it as a relationship built on trust, and when we see a family business succeed thanks to the advice we give them, it confirms we are in the right business,” Dr Hima concludes.