After graduating from Solvay Brussels School, I told him that I needed to get a bit of distance from the business, and that it would be good for me to start building my own experiences in a different industry.
So I launched my own company. And it failed a year later.
Ok, so is now the time to head back into the fold?
I joined The Family and learned about investing.
Then in March 2020, COVID-19 arrived. Haberdasheries were classified as “essential” stores, given that they have a product that became very rare, very quickly: the elastic bands that let people make home-made masks.
But with that market exploding, my dad’s business feels a big pain: it’s not digital and has no way for people to place orders online. 80% of sales come via fax, email or phone, and all of them have to be transcribed by hand. That was more or less doable in normal times, but definitely not during a crisis.
So I jumped in, agreeing to help the company. I soon found myself in a warehouse in Farciennes (in the Charleroi region of Belgium), ready to start selling zippers, just like my dad.
And by getting into the boxes and the muck, I understood better why I’d been so reluctant to join the company before.
The real problem at SMBs
For years now, businesses have been facing unprecedented pressure. They’ve seen competition growing in a market that’s more and more global, China raising prices, a talent war, ecological considerations… These are all coming together as colossal challenges for many industries, each affecting margins, to the point of having a total impact ranging from 20–50%. As if that wasn’t enough, then came along COVID-19 and more recently the war in Ukraine, resulting in maritime transport costs multiplying by up to 6x and many commodities’ prices soaring.
All of those topics have made headlines across the world for years. But in my eyes, there’s another threat that doesn’t get nearly the same kind of press: the lack, to not say the absence, of digitalization in SMBs. Within SMBs themselves, it’s an underlying worry that usually is linked to competition: “If I don’t get this place up to date, our competitors will…” That’s true — but it’s also a cliché that’s too easy to set aside, a worry for another day.
Only 27% of SMBs have an online ordering solution
Digitalization is just one element in the processes that can, over time, have significant economic impacts, but it is an absolutely central part of a company’s ongoing existence and transmission between generations. Current estimates suggest that 27% of SMBs have an online ordering site. But who’s going to be charmed by the idea of taking over a business that hasn’t yet transitioned to the digital world? Definitely not all those business owners’ digital-native children.
This has been clear for years. Back in 2014, I participated in a seminar organized by the Bank of Luxembourg, headed by Philippe Depoorter and led by Valérie Denis. The seminar concentrated on the intergenerational transmission of family businesses. I was joined by about 20 other children of entrepreneurs, talking about what was holding us back from wanting to take over our respective family businesses. Two things really struck me: first, our problems related to being the “next generation” were all the same, no matter the size of our parents’ companies; and second, we were all worried about having to take up the massive project of digitalization.
The talent war
All businesses suffer as they wage the talent war. 80% of SMBs, which are family businesses, don’t really realize that those talents are… also part of their families. If a family business wants to maximize its chances of having its next generation take over, it has to ensure that the business has modernized and adapted to the digital age.
(By the way, even if nobody in the family wants to take over, it’s critical to succeed in the digitalization process since then you’ll need to find someone outside of the family to take over, whether through a management buyout (MBO) or an acquisition. In trying to do so, not having moved the business into the digital age becomes an even larger obstacle, since you won’t have history’s most reliable lever: guilt.)
For my part, I can’t say whether I’ll ever take over for my father — after all, I left the family business to launch OrderCast! But I do know that the work I did, digitalizing both internal processes and improving the customer experience with an easy online ordering solution, made my dad’s business more attractive for both clients and top talent that could eventually take over.