The map of family business financial needs

Abstract

The presence of a family group in the ownership of a firm characterizes the system of governance, the financing criteria and the typology of financial needs. This is not confined to profit and asset interactions between the family and the firm but involves the profile of requests made to the financial system as a whole. The resulting framework is quite complex: the entrepreneurial family as such, the firm governed by the family and the family business become independent actors who make requests and express needs which find different interlocutors, belonging to the sectors of corporate banking, private banking or to the area of consulting and professions (accountants, legal firms, notaries, advisors etc.). The heterogeneity of the supply system is not to be attributed to market carelessness or lack of preparation, it is rather the clear reflection of the "particular" nature of family business so that the variety of competitors represents a structural condition of the relation between family busiess and financial system. Two needs or consequences result from this. The first refers to the mapping of family business requirements. Independently from the individual characteristics of the financial intermediary or professional interacting with the family firm, the correct interpretation of the requirement system and the identification of a criterion for the relation between the individual requirement areas and the services provided are the necessary condition for permanence in the market and for the creation of a competitive advantage in the course of time. In other words, the issue of segmentation precedes that of identification of the competitive model to position the offer in the market of services designed for the family business. The second refers to the identification of success critical aspects when using a segmentation model dedicated to family business. From this point of view, the specificity of intermediaries and professionals depend on their selection of product-need combinations consistently with their own general business model and with the elements of major interaction with family firms. This means that it is difficult to define a sole competitive model of family business banking but it is necessary to detect the diversity of possible models and the possible areas for overlapping and complementarity. This chapter intends to tackle the issue of segmentation, whereas the issue of success critical factors for the appropriate positioning of family business financial services will be dealt with in the following chapter. © Springer Berlin Heidelberg 2005.