North's family-run businesses need to bring in new blood

Belfast Briefing:"Family, religion and friends - these are the three demons you must slay if you wish to succeed in business."

Words of advice from Charles Montgomery Burns, the fictional nuclear power-plant owner from The Simpsons cartoon.

He may not exactly be real - except to millions of Simpsons fans - but he could not speak truer words when it comes to doing business in the North.

Family firms have long been considered the backbone of the North's economy, with almost 90 per cent of local companies employing fewer than 10 people.

The "keeping it in the family" approach was once considered a growth strategy for many companies who built their reputations and fortunes by employing their nearest and dearest.

So it should have come as no surprise when it emerged that many of the North's elected politicians have family members on their payrolls - not least of all Northern Ireland's First Minister, the Rev Ian Paisley, who employs his son, Ian Paisley jnr, as a researcher.

It is not that Paisley snr is committing an offence of any kind - he is perfectly entitled to employ his son in the role, which is funded by taxpayers.

Details of the salary Paisley jnr receives as his father's researcher have not yet been disclosed. He currently earns £43,201 as a member of the Legislative Assembly and £19,609 as a Junior Minister in the Executive.

Most of the North's political parties - except the DUP - have confirmed that many Assembly members are running their own little family businesses as such by employing relatives among their staff. It is up to taxpayers to judge whether this offers good value for money.

What is more certain is that Northern Ireland owes genuine family businesses a debt of gratitude. In the not too distant past, when no one else was interested in investing in the North, family-run firms created jobs and ploughed profits back into the economy.

Entrepreneurs such as Dr Billy Hastings, who founded the Hasting Hotels Group in 1968, and Dr Peter Fitzgerald, who established Randox Laboratories in 1982, took big risks to get where they are today.

They may have started off as small, family-controlled concerns, but the Hastings Hotels Group and Randox Laboratories have grown to become significant employers and stakeholders in the North.

They enjoy the kind of success that most small family-run businesses can only dream about and they make an important contribution to the economy.

But with the changing political landscape in the North and the new emphasis on attracting international investors, there is a danger that this contribution could be taken for granted.

Small businesses face many challenges in the current uncertain economic climate - they are likely to be hit harder than large firms by the credit crunch and by the squeeze on household incomes.

Research suggests that fewer than 30 per cent of family firms are successfully handed over to the second generation, while less than 10 per cent make it to the third generation.

The Hastings Hotels Group is an exception to this rule, but what makes one firm succeed where another fails? And shouldn't the North's politicians be concentrating on growing genuine family businesses rather than their own?

Nigel Dodds, the North's Minister for the Economy, believes the small business sector has a significant role to play in Northern Ireland's economic future.

He says one of the Executive's targets is to grow local businesses by helping 600 existing companies become exporters for the first time by 2011.

It is an ambitious target and one which has become all the more difficult as economic conditions grow tougher.

It also raises questions as to why these 600 companies are not exporting already.

One family-owned business in Co Derry which did not wait around for the Government to show it how to sell its product is Genesis Breads.

The company started life in the 1960s as a home bakery shop in Magherafelt run by Joe and Roberta McErlain.

It is now run by their six sons, each of whom has an individual role in the company.

Genesis Breads employs more than 150 staff and sells to a range of customers including Sainsburys, Tesco Ireland, Dunnes Stores and Superquinn.

The reason for the family's success is simple: they took a great product and made it better. They invented a new range of premium-quality breads and went out and found customers for it - not exactly rocket science, but it worked.

Family businesses need support and they need credit for what they have achieved to date.

Running a successful firm today is no longer just about "keeping it in the family"; it is about realising that you need to bring new blood into the business to keep it alive.