The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian family-owned businesses will continue to undergo “cyclical rises and falls” unless their owners employ proper succession planning, one such group yesterday expressing hope it could act as “an inspiration” to others.

Franklyn Butler II, president of Milo B. Butler & Sons, told Tribune Business that the group viewed its recent appearance on the front cover of global magazine, Family Business, as “a nice feather in our cap”.

The magazine, which bills itself as ‘the guide for family companies, featured Milo B. Butler & Sons as its lead article, detailing how the group founded by the Bahamas’ first post-independence governor-general had overcome numerous succession planning and governance challenges as it changed hands between two generations.

“It’s huge in the context of the Bahamas, where we have so many family-owned businesses that struggle with so many of those issues,” Mr Butler said of the company’s starring role.

“Many of the large businesses in this country are facing these issues, and don’t know where to turn, how to resolve them, so to be an example to them is huge for us.”

He added: “For our family, and family at large, to be featured because of what we’ve been doing is just fantastic.

“Our own family history is so unique and special to the Bahamas, and to have such a prominent history featured is great, because we don’t have many thriving legacies [in the nation] at this point.”

Private, family-owned businesses have traditionally been the backbone of the Bahamian economy, allowing locals to reap the benefits from being entrepreneurs while simultaneously creating employment for hundreds of their countrymen.

However, succession planning in such companies has long been a common problem, impacting growth at both the business level and for the wider Bahamian economy.

The ‘founding’ and/or ownership generation often fails to leave wills or directions for who is to run the business, their expectations for their children, and how the shareholding structure breaks down - an especially acute problem among large families.

Mr Butler described proper succession planning to avoid such pitfalls as “huge” and something that “had to be done” to ensure that the transition in family-owned businesses was huge, and they continued to prosper.

“If these [factors] are not addressed, we will continue to see this cyclical rise and fall of these enterprises,” he told Tribune Business.

Focusing on the Bahamian hardware/home retailing sector as an example, Mr Butler said: “If you look at this industry, once the leader was John S George. The next day, it’s Kelly’s.

“Next day, it might be someone else. Usually, it’s because of family issues that are not resolved, another family takes the risk and ends up in advancing in that area.”

The hardware/home retail example is, after John S George, hypothetical, but Mr Butler told Tribune Business that the fate of family-owned businesses undergoing a succession was critical to the wider economy’s performance.

“When you look at the amount of family businesses and the impact they have on the economy, it is tremendous,” he said.

“I know we look for foreign direct investment, maybe too much, but if we can find good, solid family businesses that have assets and the ability to be owners of larger institutions, hotels and so forth, that only bodes well for the Bahamas.”

Increased Bahamian economic ownership would only improve the prospects for this nation and its people, but Mr Butler acknowledged that some industries were regarded as too risky or capital intensive for family-owned businesses.

“We’re going to continue to propagate this foreign direct investment mantra the Government looks for, foreigners to invest in this country, but the more Bahamians own, the better off we could be,” Mr Butler told Tribune Business.

This, he conceded, would require extensive training to build the necessary expertise and technical capacity in family-owned businesses.