Family-run businesses: driving Canada's economy and fostering resilient communities
Family-run businesses are a big driver of Canada’s economy, providing millions of jobs and boosting economic resilience.
Naim Ali, chair of the Family Enterprise Canada board, says family businesses are also the backbone of many local communities.
“When we think about the landscapes in all of our communities, it’s family businesses that have the power to change and define success.”
Naim Ali, Board Chair, Family Enterprise Canada
“When we think about the landscapes in all of our communities, it’s family businesses that have the power to change and define success,” he said.
Ali is CEO of SM2 Capital Partners, a Calgary-based portfolio of operations in the hospitality sector that includes car rental, hotels, casinos and insurance. Founded in 1974, the company started as a Budget Rent a Car franchise owned by his father and his uncle.
There are now seven family members involved in senior management or shareholder roles.
Family-owned enterprises generate nearly half of Canada’s private sector real GDP, with a value of about $575 billion. They account for about 63 per cent of all private sector firms and employ nearly seven million people - that’s nearly half of all private sector employment.
Family Enterprise Canada, a member organization of the Coalition for a Better Future, helps these family businesses succeed by connecting, supporting, inspiring, educating and speaking on behalf of Canada’s family enterprise community. It’s a national community and resource centre and learning hub for business families, helping them to overcome challenges and embrace opportunities that are unique to working with family members.
Ali said the organization has been invaluable to him, helping him gain a deeper understanding of the dynamics of working at and leading a family-run business. He said it also serves as a forum for like-minded business people to have conversations in a “safe place.”
The most valuable of all those are the conversations around relationships and how to resolve tensions or disagreements in a way that leads to productive, solid business decisions.
“All families have conflict, and we like to frame it as positive conflict, especially at the boardroom table; that’s how we navigate those challenges,” he said.
But while there are inherent challenges in any family dynamic, there are also shared core values and trust between family members that are foundational strengths for the business.
During the pandemic, for example, revenues dropped by 95 per cent due to lockdown measures. Concerns about protecting the company were compounded by worries about helping staff members during the time of financial loss and stress.
“I’m so grateful I had family to literally go to battle with,” he said, recalling the late-night calls to discuss ways to get through the crisis.
Ali said SM2 Capital likes to treat employees like members of the family, and like most family businesses, strives to give back by supporting community and philanthropic initiatives.
“I feel that resonates across the board in terms of the positive impact that family businesses have on communities. We’re so engaged and many of us are the face of our businesses….Our relationships are very symbolic of the relationships we have amongst ourselves,” he said.
“We recognize that now is the moment to address significant economic, social and environmental issues - including generational shifts in mindset regarding ownership. One of the solutions will be harnessing the impact family enterprises can have on these challenges.”
The business that launched in 1974 is now propelled by the “rising generation” of family executives.
But like most family businesses, there is much thinking about the future, in terms of both strategic growth and transitioning to a model where more senior executives are appointed on merit and not based on their last name.
That would include more engagement and coaching from outside – and having “less fingers” in the daily business operations.
Ali is not alone in this forward-thinking and longer-term planning as the business transitions to the next level while it maintains the fundamental family values.
Family Enterprise Canada works to help businesses through transitions and position them for long-term success that helps them build strong communities and contribute to a strong national economy.
Olivier de Richoufftz, General Secretary for the Family Enterprise Foundation, said the organization has shared goals with the Coalition for a Better Future.
“Both organizations are working to address the changes occurring in the family enterprise ecosystem to build a better tomorrow for our families, our communities, and Canada’s economy,” he said. “We recognize that now is the moment to address significant economic, social and environmental issues - including generational shifts in mindset regarding ownership. One of the solutions will be harnessing the impact family enterprises can have on these challenges.”
