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Centre for Enterprise

Family Business Edition


How the only remaining family-owned shipping business in Liverpool, The Bibby Line Group, diversified in the 21st Century

How family businesses grow - Surviving the next generation - The make up of a family firm - Succession planning in family business SMEs

What do the Institute of Family Businesses say? Viewpoint from Director General, Mark Hastings Putting knowledge to work to grow business • Picture by Ade Hunter



Introduction from the Prof. What percentage of the 4.6 million UK private sector enterprises are family firms? UK Family Firms

75% What percentage of the 9.2 million people in England working for private sector enterprises are in family firms? Job Creation


9% of the EU GDP is derived from family businesses. What impact do the UK family firms have on the UK’s GDP? Impact on GDP

23-30 %

How many family firms in the UK make it to the third family generation?

I am excited to introduce this issue, as it covers a subject area of great personal interest to me – Family Businesses. National economic growth can be associated with the continuance of family firms, since capital will remain in the business following recession. It is therefore essential that family businesses gain the support that they need. The North West is home to some of the largest family firms in the UK, including Booths supermarkets, Warburton's and Frederic Robinsons Brewery to mention a few.

• Picture by MMU

Professor Lynn Martin

So what is so special about family firms? A review of policy documents does not bring many references to family firms, except in Professor of taxation statements on inheritance and other succession issues. Are there so few Entrepreneurship family firms that they aren't worth and Director of the considering? Do they make so little Centre for Enterprise contribution that they really don't figure in economic discussions? There are after all an estimated 3 million family firms in the UK, which means that two out of three of all private sector firms are family firms. So surely they might be an important sector to look at? When government explores businesses within the UK, it often does so by size, sector or behaviour. The behaviour of most interest to the government is growth, understandably perhaps given the current economic difficulties, so searching on 'growth' on the UK government site brings over 30 entries. Size relates to European Commission definitions, as seen in reports on 'small and medium sized' enterprises, the current BIS emphasis on the medium-sized firm, etc. while sectors receive specific attention in response to changing markets, as with actions this year for the tourism industry. Again, searching government sites brings a range of size and sector related surveys, reports and actions. On the other hand, searching on the UK Government site for 'family business' delivers two entries - a survey of small family firms in 2012 (Small Business Survey of 2012, SBS 2012) and a case study for the same year on a family recycling firm which collects and sorts up to 200 tonnes of clothing which is exported for re-use in Africa, Asia and Eastern Europe. The survey offers insights from a survey with c. 4,768 firms with one or more employees in England, Scotland, Wales and Northern Ireland. The report compares family with non-family firms, in Scotland, Wales, Northern Ireland and England, where one sixth of interviews in each nation were conducted with enterprises with no employees; one third with micro businesses (one to nine employees); one third with small businesses (10-49 employees); and one sixth with medium-sized businesses (50-249 employees). And that's it...I couldn't find anything else that focussed on the specific qualities, needs or intentions of family firms. Given their numbers in the business base within the UK, might it not be time to do more to understand the qualities, possibilities, issues and opportunities unique to family firms? Whether regionally or nationally, they are the bedrock of our economy. A look overseas, particularly to Germany, also shows how powerful family firms can be to deliver the economic growth needed for the United Kingdom. Time to look at family firms? It's long overdue! This issue of IMPACT aims to give you an insight into some of the knowledge that the MMU Centre for Enterprise holds around family firms. There are lessons to be learned for all in terms of employee dynamics, succession planning and work/life balance. Whether you are a family business or not, we aim to give you some practical takeaways, case studies and tips.

3rd Generation


Hello and welcome to this, the latest edition of our quarterley e-magazine IMPACT.

2nd Generation


1st Generation

That's all from me for now, I hope you enjoy the issue and don't hesitate to get in touch with us with any questions, feedback or ideas. We are interested in you and your business, so the first step is to come in for a cup of tea! Lynn

“Putting knowledge to work to grow your business” The Centre for Enterprise at Manchester Metropolitan University is passionate about turning research into practical knowledge, which can be applied to improve regional businesses. Our areas of expertise are growth, leadership, entrepreneurship and sustainability. We offer a range of programmes around these themes, many of which are fully-funded. Register you and your business with us to access our knowledge, our business network and to grow your business.

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INTRODUCTION Lynn Martin, Professor of Entrepreneurship and Director of the Centre for Enterprise So what is so special about family firms?


CASE STUDY Surviving six generations: How a flexible approach allowed family firm Bibby Line Group to become the diversified distribution company it is today


VIEWPOINT Mark Hastings, Director General at the


Institute of Family Business, gives us a unique perspective on family businesses in the UK

• Picture by Ade Hunter


CASE STUDY Mark Coleman: Growing Homestyle Kitchens and Bedrooms


STUDY The make-up of a family firm, More jobs for the boys? - Succession planning in family business SMEs


Q&A We talk to family firm business owner Chris Purcell

at Manchester and Cheshire Construction Co. Ltd


INFOGRAPHIC Where are the women in family firms?


Small Business Survey Results


INSIGHT How do family businesses grow? Research

• Picture from Maersk image bank

stats from the Centre for Enterprise, MMU


EVENT FEATURE Family firms visit MMU: Co-hosted event with the Centre for Enterprise and the Institute of Family Businesses



PROGRAMMES - We would love to work with you: why

not browse the current support programmes available?

• Picture by Katie Leach

3 • Picture from

CONTACT US Want to contribute to Impact? Each issue of IMPACT carries a central theme, but also relies on contributions from the businesses we work with, our dedicated research team, the wider MMU community and our partners. We always welcome your input so please get in touch. For Centre for Enterprise events listings: For future IMPACT e-magazine issue themes and to submit a contribution for consideration please email:

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Ask the Prof a question? Questions will be printed and answered in the next issue.

Want to subscribe to Impact quarterly? Visit where you can sign up for our free new event and programme alerts Join the Centre for Enterprise on LinkedIn

Professor Lynn Martin Professor of Entrepreneurship and Director of the Centre for Enterprise Direct Questions to: 0161 247 3989

Follow us on Twitter @mmucfe

General Enquiries? Telephone: +44 (0)161 247 3871 Email:

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Case Study


• Research by Dr Val Antcliffe & Prof Ossie Jones

Surviving six generations

• Picture from

How a flexible strategic approach allowed family firm Bibby Line Group to become the diversified distribution company it is today The Bibby Line Group, founded in 1807, is the only remaining family-owned shipping business in Liverpool. So how have the knowledge and assets acquired across the generations helped the company to survive the post war economic turmoil associated with Liverpool and become a successful, diversified company in the twenty-first century? Research by Dr Val Antcliffe (Centre for Enterprise) and Prof Ossie Jones (Liverpool University) set about unravelling the story by talking to the current Chief Executive and non-family members of the management team, exploring the company archives and visiting the library at the Liverpool Maritime Museum.

‘Our history has taught us that if you stand still you're dead’ The research revealed a fascinating story of near financial disaster in the 1970s when the

oil crisis prompted a period of decline in shipping. Bibby Line had invested heavily in new vessels and were in debt to the banks. Determined not to lose a business that had already survived for five generations, the chief executive embarked on a strategy of consolidating ownership and using existing knowledge and skills to diversify into marine-related areas. A typical example is the decision to diversify into accommodation barges for North Sea oil workers in the early 1980s. These were later used to house troops during the Falklands war and Bibby Line went on to supply floating storage units and production facilities to the oil industry. At the same time the company identified new areas that required little capital investment. Bibby Distribution was formed by leasing vehicles and warehousing, allowing Bibby Line to gain a foothold in a sector that was growing rapidly at the time.

The research highlighted: • Numerous ways in which the company had used a flexible strategic approach • A conservative financial policy, to allow them to respond quickly to new opportunities • The company regards non-family managers with new areas of expertise as a valuable resource • By retaining ownership within a small family group they are able to take a long term view without the need focus on shortterm profit As the current Chief Executive,, Simon Featherstone, explained: “Our history has taught us that if you stand still you're dead… our market disappeared in the 1960s …… if we'd stayed still we wouldn't have survived”.

Viewpoint: Mark Hastings, Director General at Institute of Family Businesses “When I talk to people about family business all too often I am presented with the same common misconception, that family businesses are small simple enterprises, large in number, but insignificant scale or scope. The reality could not be more different.

• Picture provided by IFB

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Two out of three private sector companies are family owned or managed. They provide well over nine million jobs and in 2010 generated revenues of £1.1 trillion, and contributed £346 billion value added to UK GDP. Many of the UK's best loved

and most recognisable brands are family business. Names like JCB, Clarks, Warburtons, Dyson, Swire, Glenfiddich, Fenwick, Yorkshire Tea, McAlpine, Reed, Ginsters and Speedo. So how does this misconception arise and why is it important? One reason could be how we normally categorise business, size or sectors tend to be the main distinguishing factors when academics or governments look at business. This is understandable as it is easy to subdivide businesses in this way, but ownership can be a

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• Written by Mark Hastings

• © Royalty-Free/Corbis

significant factor in how firms behave and should not be ignored. The ownership structure of a business can have a dramatic effect on how that business is managed and how it will perform in the short, medium and long term.

“Family businesses embody and embrace responsible capitalism and are the backbone of communities”

The first difference between family businesses and other private sector enterprises that many people arrive at tends to be issues relating to succession. This can be a more complex issue for those family businesses which are directly or partly managed by the family owners, but it is not as significant as you might think. Many family owners are owner-governors and so not directly involved in the day to day running of the business. Succession

A more interesting distinguishing characteristic is how the values of the owners percolate into the business and affect how it operates. Family businesses usually take a much more long-term approach to investment and return. They are looking to build sustainable business that can be passed on to future generations. They are less likely to take on dangerous levels of debt, as has been demonstrated over the past few years with family

in the management team is often therefore, no more difficult than it is for any other firm.

businesses significantly less likely to fail during the slowdown, and so are more able to lead the way to future recovery. Family businesses embody and embrace responsible capitalism and many are the backbone of the communities in which they operate. As a business model, it has proved both long lasting and successful. It would be a foolhardy government indeed that misses this point. In Germany 95 per cent of private companies are family owned and this leads to the distinctive characteristics of their economy – some of which we would do well to foster in our own if we are to achieve the long-term sustainable growth we sorely need.”

Mark Coleman: Growing Homestyle Kitchens and Bedrooms Homestyle Kitchens and Bedrooms is owned by Mark Coleman and his family. They have successfully manufactured and distributed kitchen and bedroom furniture for 14-years. However, it wasn't until Mark had a successful experience with a Personal Trainer to lose weight and get fit, that he decided to explore how professional training and coaching could also benefit his business. Mark had entered the business straight from school, however, after successfully losing weight and getting fit, he realised that he is the kind of person who can learn and benefit enormously from professional support, training businesses and social enterprises and coaching. define and achieve their business Mark began to seriously grow the growth aspirations. Mark says: business, after being accepted onto the prestigious Goldman “The programme has been useful Sachs, 10,000 Small Businesses in setting up systems and keeping programme. A unique, practical f o c u s w h e n s o m u c h i s programme designed to help the happening. I am working through leaders of established small my Business Plan and have leant

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this period he has also restructured staffing and is now surrounded by innovative, purposeful and positive colleagues with a 'Can Do' attitude. Mark says: 'With the help of the team at MMU Centre for Enterprise I have gained the confidence, knowledge, tools and resources required to grow the business safely and responsibly.'

• Picture by Ade Hunter

an enormous amount about finance, I recently spotted an error in my accounts which could have cost me £16K!” With the aid of the business coaching through the programme Mark has professionalised the company sales system. During

Homestyle has recently taken on 3 new staff members and they now stand as one of the largest distributors of kitchen doors in the UK and have received glowing recommendations from The Sunday Times, Channel 4 Homes and Property Ladder.

Get Involved Mark benefited from the Goldman Sachs 10,000 Small Businesses programme - find out here if you could too.

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Study More jobs for the boys? Succession planning in family business SMEs


• Research by Dr Susan Baines

The make-up of a family firm

• Research by Prof Lynn Martin

What we did: We approached 128 family firms in the West Midlands, to participate in a survey around succession planning. We selected four business sectors: manufacturing, hospitality, care and ‘other professional services’ and each business had 50 employees or less. Succession issues were explored in a series of interviews with senior managers. Results we found: • No company selected a female successor despite strong existing candidates, whether relatives or internal managers • Daughters were inappropriate for succession - they were “too good” for the workplace or were “doing something better”, i.e. teaching, health care, etc. • CEO’s planned to pass on their company to a male relative (usually son or sons) • Although female relatives benefited from re s o u rc e s f o r h o l i d ay s o r h o m e improvements, only male relatives were seen as “heirs apparent” in terms of work status and treatment • Female relatives were neither developed nor encouraged as managers, despite frequently acting as mentors and trainers for the selected male successor What this means: The family firms we interviewed without succession plans who were coming up to possible retirement did not reinvest in the same way they might if the business was to stay in the family, and their long term plans were often limited to “selling up”. US observers plot national economic growth associated with the continuance of family firms since capital will remain in the business following succession, rather than the assets being disbursed. The selling up of West Midlands companies indicated in this study might therefore be seen as potentially detrimental to regional economic success. However, without recognition of the role female members of the family might play accompanied by preparation of these members to succeed, “selling up” seems inevitable for the companies interviewed in the survey. Lessons learned: It is imperative that all employees are viewed as part of the organisations ‘human capital’. This is not to suggest that all organisations could or should go from one person to another, but simply to emphasise that gender factors need recognition in the process.

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• Picture from Maersk Image Bank

MMU has been researching business practice for many years. The majority of the research suggests that selfemployment and micro-enterprises should be seen as family self-employment, due to evidence of family participation in small and micro-business. Studies in both urban and rural areas, and across varied economic sectors, show that microbusiness activity is embedded in the household. The research indicates that businesses were often founded in situations where limited livelihood choices were available. The business often started with limited financial resources and often relied on external financial support such as grants. These businesses are often thought of as being run by a single entrepreneur, but the evidence shows that in the majority of cases other family members, especially spouses, also performed business tasks. Family members rarely had training in these tasks and both business owners and spouses often lacked skills in areas such as bookkeeping, marketing and IT. It is also clear from the research that most of the businesses made demands on family members, even though few of the businesses were formerly family businesses. Hard work and family labour were found to be part of small business life across all ethnic groups. Patterns of working were diverse and often gender dependent. For example, in male-headed businesses the men often worked long hours supported by part-time work from spouses who also often looked after children. Female-headed businesses were more varied with some women setting up a business when children were older or setting up work-family inclusive businesses. Setting up a business was a

means to give some women with children financial independence. Evidence was obtained of a move to traditional ways of working in these businesses, for example long working hours, use of the family home as a workplace, gender-stereotypical division of labour and co-operation at a household level. Spouses were frequently found to participate in a business, but often not under conditions of equality. For example, often no formal wage is paid to a spouse, which limited their financial independence. Some women participating in microbusinesses had given up formal paid work to do so with implications on their career opportunities. Micro-business owners work long hours but their businesses are often only sustainable because family members participate in managing unpredictable workloads. These findings have implications on small business policy, which often assumes that a business is run by one individual. There are also possible impacts on the national skills base as family members in a micro-business often reported lack of access to formal training. There is high incidence of participation from younger family members on a casual or seasonal basis and this was often paid work. Interestingly, few of the business owners' children saw opportunities for succession in their parents' businesses. However, it was very apparent across all of the research that family work in micro-businesses was the norm.

Get Involved Are you a family firm? We would love to work with you. The first step is to get in touch with us: or 0161 247 3871

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Q&A We asked family firm business owner Chris Purcell at Manchester and Cheshire Construction Co. Ltd 1. Do you think of yourself as a family firm? If so why - what makes you a family firm? 2. Who within the family is involved and in what roles? 3. What are your ambitions for the future? Will it remain a family firm in the medium and long term? Why / Why not? “Yes we do think of ourselves as a family firm. The company was founded by partners John Purcell and Charles Lowe in 1971. There are currently 5 family members working in the company and although we have over 40 employees in total, this core of family members ensures the company has a family 'feel', which manifests itself in the following ways: Long term approach - we have been in business for 42 years and are still working with clients we've had since the 1970's because we take a long-term approach rather than trying to make a fast-buck. Our employees adopt the same approach which leads to quality projects and satisfied customers. Employment stability - we retain our employees, even during lean spells, and we have an average length of service of over 10 years, which we believe to be unique for a construction company. Employees have job stability and therefore know that if they come up with an innovative idea it will be considered and they will be here to implement it and benefit from the results. Pride in our work - we are proud of the projects we deliver. We see the quality of our work as not only a reflection on the company but a reflection on our family names. Again this feeling of pride resonates throughout our workforce. Financial Stability - we continually reinvest our profits into the business and this has resulted in a financially stable company with no bank loans or overdrafts. This financial stability gives us breathing space to plan strategically which means calm, sensible, longterm decisions rather than knee-jerk reactive decisions.

• Picture by Ade Hunter

Day-to-day involvement - our clients appreciate the fact the business owners are involved in the business on a day-to-day basis. They know they can contact us with any issues and this is clearly explained to new and existing clients throughout our contracts. We will continue as a family business and believe it is the family ethos described above is one of the reasons we have succeeded during the recession whilst many of our competitors have failed. Our ambitions for the future are to continue our recent growth and hit £10million turnover by 2015, whilst maintaining employment for 40-50 employees. It will remain a family business both in the medium and long term. Although we are targeting growth we do not want to lose this ethos and will ensure we pass on a successful and healthy company to the next generation”. (

Where are the women in family firms? Research done by the Centre for Enterprise team has shown that women are key members of family firms, whether as leaders, equal partners or as employees carrying out jobs.

Family women-led VS Non-family women-led

They often act as the 'invisible glue' that holds a family firm together. When tensions at home spill over into work or vice versa, women often provide emotional buffers as wives and mothers to maintain relationships. Emotional issues aside, they are also more often found as decision makers and partners or directors in family firms than in non-family firms.

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Non-family / women-led 28% 22%


23% 21%


17% 12%


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14% 11%

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If you are looking for firms led by women though, the opposite is true. Twenty two percent of non family firms were led by women compared with 17 percent of family firms, across the sectors as shown by the diagram on the right.

• Picture by Ade Hunter

Al l

Overall, the last Small Business Survey (2012) report paints a picture of family firms as the place to find women partners and directors, with 50% of the family firms with female partners or directors, compared with only 30% of non-family firms.

Family / women-led

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• Research by Prof Lynn Martin

How do family businesses grow? Research stats from the Centre for Enterprise, MMU

• Picture by Hugo Burnand, AP

What are the most important four factors for a family firm to grow?

What three things stop a company from growing?

Where is the best place in the UK to grow a family business?

1. Long term viewpoint, a willingness to settle succession and to shift power

1. Short-termism, lack of planning, lack of investment

1. Almost anywhere!

2. Willingness to bring in external resources at critical points or with critical contacts or skills 3. Being an entrepreneurial family, not just an entrepreneurial owner

2. Lack of critical resources, including the right contacts and human resources 3. Lack of market awareness in changing conditions

4. Recognition of management and planning

2. Rural areas and areas of urban deprivation are where most sole traders, 'mom and pop' businesses are found 3. Birmingham comes ahead of Manchester on the positive churn rate, London still has a slight edge

Family firms visit MMU Co-hosted event with the Centre for Enterprise and Institute for Family Business A recent event at MMU Centre for Enterprise saw family business owners connect to look at different ways of working in a family firm. The event was cohosted by the Institute for Family Business (IFB) and aimed to share best practice. The event heard from Mike Roberts, regional chair of the IFB and William Robinson, who is the Director of Frederic Robinson Ltd, Family Brewers and a member of the sixth generation of the family to run the business. Business owners who attended the event shared experiences and success factors. The Centre for Enterprise shared UK, US and European research, which indicates the success of a family business relies on having an entrepreneurial founder with the skills, knowledge and resources to put a product or service in the right market. It also explains how identifying and upskilling family members over time is very important, along with retaining and growing an entrepreneurial culture with strong family values.

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The event looked at lessons to be learned from ‘Mittelstand’, which is the body of small and medium sized enterprises often credited for Germany’s economic ‘miracle’ in the past and for maintaining German strength in manufacturing and exports in the current crisis.

“A v o i d d e b t , m a i n t a i n independence and focus on the long term” Research shows that many entrepreneurs start businesses with an exit strategy in mind. In contrast, Mittlestand managers are... “more interested in building and preserving the business for the next generation”. An example was drawn between Siemens and Mittlestand firms, who typically have 10 and 20 year plans. Discussing the growth of Claas, a manufacturer of agricultural machinery from Mittlestand to 3.3 billion Euros, CEO Theo Freye explains that “it was a very long process - in our case almost 100 years. We have a very long-term time horizon”.

SMEs employ 83% of all apprentices in Germany, more than their share of total employment. Tital GmbH, a company of 420 employees producing precision-cast products for the airline and racecar industries in North Rhine-Westphalia’s Sauerland region is training 16 apprentices. Two will be offered a scholarship to study engineering at a nearby university in exchange for returning to the company after graduation. This event is just one example of how we were able to support regional family firms, bringing together our family-firm orientated partners, research, business owners and advisors.

Get Involved We welcome any business who has growth aspirations, so please get in contact for our upcoming events or to discuss how we can support you. Centre for Enterprise, MMU 0161 247 3871

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Join a Programme? To find out more, why not get in touch for a chat? “It has been like having your own Mastermind group - it can help you identify and define a problem then discussing around the issue helps you to a greater understanding. The best thing about it is that you take time out to think about the problem from the outside”

Knowledge Action Network Uncover your business challenges and develop solutions through a network of like-minded peers. This is a fully funded programme, aimed to support small businesses in the North West to grow and innovate. If you would like to be considered for the next intake please express you interest here

“I’ve been supported all the way by my coach who helped me with some crucial decisions, even giving me phone advice outside of sessions. We are in a very exciting place at the moment”

10,000 Small Businesses This programme is a unique, practical programme designed to help the leaders of established small businesses and social enterprises define and achieve their business growth aspirations. Applications are open now for the next intake why not register your business here

“The 10,000 Small Businesses programme has made me recognise my strengths and it has helped me put processes in to place”

Fast Forward Funding Fast Forward Funding gives you all of the knowledge and skills you need to give your business the best chance of raising finance and investment. The next intake is on the 4th September, so why not register your business for more information here

“Anybody who is serious about raising finance must have a look at the Fast Forward funding programme”

Managers2Leaders Prepare for the future by developing the leadership skills of your senior staff. For more information on the next intake, starting on the 5th of September, please click here

“Managers2Leaders has helped me gain a network of colleagues and friends that are facing similar issues as mine and can understand me”

• All pictures by Ade Hunter

Register with us for updates on support & events Centre for Enterprise, MMU 0161 247 3871 Twitter: @mmucfe

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We would love to work with you. The first step is to get in touch with us and tell us a bit more about you and your business. Why not arrange a visit and perhaps we can tell you a bit more about the options available to you.


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Contact us: Website: Telephone: +44 (0)161 247 3871 Email: Twitter: @MMUcfe Address: Centre for Enterprise Manchester Metropolitan University Faculty of Business and Law, All Saints Campus, Oxford Road Manchester, M15 6BH, United Kingdom

The Centre for Enterprise - IMPACT - Issue 2 - Family Businesses  

The Centre for Enterprise - IMPACT - Issue 2 - Family Businesses

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