THINK family business and 'traditional', 'small' and even 'nepotistic' are some notions that typically come to mind.

But keeping it all in the family can have its strengths, such as retaining firm control over business direction.

However, some question the showing of favouritism on the basis of blood ties, perhaps at the expense of merit.

So, is keeping the business in the family really an advantage? Or does the conscious decision to overlook professional help ultimately become a hindrance to growth?

Ms Kee Ai Nah, director of Spring Singapore's retail division, suggests that a balance can be struck between retaining the family model and adopting good business practices.

'We have seen many family firms that have succeeded with keeping the businesses within the family. And others that have achieved great heights by hiring professional managers,' she said.

She believes that family-run businesses which want to succeed must be open to adopting best practices from other larger local, or foreign companies.

One way is to implement better human resource systems to evaluate personnel on merit instead of relationship.

'They should adopt recognised key performance indicators to track their business performance instead of industry benchmarks. And they should be able to look outside the family to hire the best person for the job,' added Ms Kee.

But for family-run businesses that still prefer to promote from 'within', she recommends that they ensure family members intended for key roles be relevantly and adequately qualified to hold those positions.

Jack's Place Holdings, a family firm that was founded in 1967, is proud to remain owned and managed by the descendants of founder Say Lip Hai.

But the local restaurant empire practises a merit-based approach to ensure that the firm hires the right people, family or not.

'At Jack's Place, we encourage and nurture our next generation by exposing them to various roles, like a service crew member, a commis cook, an accounts clerk and a baker, at an early age,' said Mr Jerry Lim, the firm's spokesman, and also Mr Say's grandson.

'From there, it is the passion and commitment that drive them or us, in this case, to play a greater role in the family business.'

Although there are many successful multi-generational companies here like Jack's Place, Ms Kee cautions that small and medium-sized enterprises (SMEs) should not be preoccupied with 'keeping it within the family'.

'It is important for SMEs to ensure that they place the best professionals in key areas, should they want to grow and succeed,' she said.

'The management team should also...pro-actively look into new ways to run their businesses more professionally.'

In her interaction with local family-run SMEs, Ms Kee found that many have seen good growth after adopting big-firm style strategies.

And to help local entrepreneurs build better business fundamentals, Spring now provides funding support for SMEs to upgrade their operations, systems and processes.

'So long as they are willing to learn and upgrade their capabilities, family-run businesses can also enjoy high growth and sustainable success,' said Ms Kee.

franchan@sph.com.sg

STRIKING A BALANCE

'We have seen many family firms that have succeeded with keeping the businesses within the family. And others that have achieved great heights by hiring professional managers.'
Ms Kee Ai Nah, director of Spring Singapore's retail division

ROUNDED TRAINING

'At Jack's Place, we encourage and nurture our next generation by exposing them to various roles, like a service crew member, a commis cook, an accounts clerk and a baker, at an early age.'
Mr Jerry Lim, Jack's Place Holdings spokesman