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Problems small firms must face

24th October 1975
Page 33
Page 33, 24th October 1975 — Problems small firms must face
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Keywords : Business / Finance

SMALL family haulage firms have an Achilles' heel—they tend to take a short-term view to avoid planning for the future, said Mr Philip Sadler, principal of the Ashridge Management College, on the opening day of the conference.

Mr Sadler split his paper, "Problems facing small family ' businesses," into two parts. He believed that there were difficulties which small firms would have regardless of ownership, and difficulties which family firms would have regardless of size.

Problems in smaller haulage enterprises (net asset; under £20,000 and turnover under £50,000) mainly arose from the absolute size of the firm rather than its competitive position relative to larger firms.

The most important problems were : O Difficulties of financing new equipment and other forms of Investment needed for survival and growth; O Pressures of cash flow reflecting the dependence of the small firm on larger customers and lack of sophistication in financial control; 0 Inability to employ specialists in management; O A disproportionate impact on the smaller business from governmental regulations of industry.

Mr Sadler then went on to outline the inherent difficulties associated with families running a business. He pointed out that 93 per cent of the chief executives of small haulage firms were either the founders of their company or members of the founder's family. This was a higher proportion than In any other industry.

The family firm had many strings, not the least of which was the loyalty it aroused in employee and customer alike. It also had some common weaknesses, the most important of which were : 1] Confusion over the objectives of the business; O An amateur management tradition; E Weak middle management and problems of management succession; E Problems of social acceptance of paternalistic styles of management,

The first trainee to be registered with the National Joint Training Committee, which is to administer and control the "Young HGV Driver Scheme," Michael Spargo, was presented with his certificate of registration by Sir Daniel Pettit, chairman of the National Freight Corporation. Mr Spargo will receive his training at [Williams Bros (Wales) Ltd, whose managing director Mr Edgar Williams has pioneered work on the scheme and is the first chairman of the committee.


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