Succession Dilemmas: A Malta-Based Family Business Perspective

Imagine this: You’re strolling down Republic Street in Valletta, the sun is setting, casting a warm glow over the historic buildings. Suddenly, you realise you’re not just admiring the architecture, but also the family-owned shops that have been part of Malta’s fabric for generations. Now, picture this – what happens when the owner decides to retire? This is the reality for many local businesses, and it’s a complex issue that goes beyond just handing over the keys.

Blood, Sweat, and Tears: The Emotional Toll

Family businesses are more than just enterprises; they’re a labor of love, a legacy. When it comes to succession, emotions run high. “It’s not just about who’s the most capable,” says Dr. Joseph Borg, a local psychologist who specializes in family businesses. “It’s about who’s the most invested, who understands the business at its core, who feels the same passion.”

Take the Galea family, owners of the iconic Caffe Cordina in Valletta. For decades, it’s been a meeting point for locals and tourists alike. When the current owner, Joe, decided to step back, he faced a dilemma. His children had successful careers of their own, but none wanted to take on the responsibility of running the cafe. “It’s not just about working hard,” Joe says, “It’s about loving what you do, and that’s hard to pass on.”

Money Matters: Finances and Fairness

Money is another sticking point. How do you decide who gets what? Should it be based on skill, time invested, or something else? “It’s a tricky situation,” says Dr. Maria Attard, a local business consultant. “You want to be fair, but fairness isn’t always equal. Sometimes, it’s about what’s fair in the context of the business and the family.”

In Malta, where family businesses are a significant part of the economy, this issue is particularly relevant. According to a study by the University of Malta, family businesses contribute to around 60% of the country’s GDP. So, how these businesses navigate succession can have a real impact on the economy.

New Blood, New Ideas: The Role of Next-Gen

Not all succession stories are doom and gloom. Sometimes, the next generation brings fresh ideas and new energy. Take the Cassar family, owners of the popular Ta’ Marija restaurant in Mgarr. When the parents decided to retire, their son, Mario, took over. He brought in new ideas, like a revamped menu and a stronger online presence. “It’s a balance,” Mario says, “Respecting the past while looking towards the future.”

But even in these cases, there can be challenges. “The next generation often has different ideas about how to run the business,” Dr. Attard says. “They might want to modernize, but the older generation might be resistant to change.” Communication and compromise are key here.

So, what’s the solution? There’s no one-size-fits-all answer. Each family, each business, is unique. But open communication, respect for each other’s perspectives, and a willingness to adapt can help navigate these complex waters. After all, as Joe from Caffe Cordina puts it, “A business is a living thing. It grows, it changes, and so should our approach to it.”

As Malta continues to evolve, so too will its family businesses. The succession dilemma is a complex one, but it’s also an opportunity – an opportunity to pass on a legacy, to bring in new ideas, to shape the future. And that’s something worth investing in.