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Family Business Promotion Association
(FBPA)
Business Model Report
Based on international FBN standards
Third edition
Dated August 2023
Foreword
In today’s evolving world, in most countries, family businesses play a key and undeniable role in the growth of the Gross National Product (GNP). In Iran, due to the distinctive features of family business with a large percentage of ownership, power over strategic decisions, vote control, multi-generational participation in governance and management, family businesses in this potential opportunity are worthy of attention and can be promoted. They have a significant contribution to the economic and social development of the country.
Entrepreneurs, owners, leaders and senior managers of Iranian family businesses, if they receive effective legislative support and to be more familiar with the concepts, theories, approaches, models and practical tools needed and benefited from the experiences of generations in a timely and proper way, naturally they will perform the roles and responsibilities of governance, continuity and transfer of business to the next generations more effectively. In this case, in the path of progress, they will better identify and manage the big challenges ahead, and they will certainly prevent possible setbacks or failure.
According to such needs, after years of thinking and follow-up, finally with the participation and effective efforts of a group of entrepreneurs and interested family business owners, the approach of creating and establishing a specialized association that is able to examine the fields , planning, training and promoting and establishing effective intergenerational communication in family businesses and perpetuating family values and legacy under the name of “Family Business Promotion Association” was put on the agenda.
Family Business Promotion Association (FBPA) is a non-profit and non-commercial organization whose activity license is number 95711 and national number is 14010438478 in full compliance with the laws and regulations of the Islamic Republic of Iran and within the framework of its constitution to achieve specific purposes and activities at the national level and it was registered on 9 -8- 2022 under number 52412.
Here, I would like to express my sincere thanks to the efforts of all the dear ones, especially the respected founders of the association, who are veterans of the first and second generations of well-known family businesses. In recent years, they have helped the association without hesitation and with full interest in all stages before its establishment. I also appreciate the respected board members for accepting the commitment and responsibility of governance and management of the association. I hope that in the not-too-distant future, in the light of their effective decisions, we will witness the advancement of the aims and influence of the association in the fields of legislation, role-playing and the success of the Iranian family business community.
Considering that the previous edition of the FBPA business model was approved by the board of directors on
7-5 -2023, but according to paragraph 8 of the minutes of the meeting dated 20-6-2023 regarding the approval of the board of directors for FBPA membership in the international network Family Business International (FBN International) and the need to comply with the requirements and conditions of membership and acceptance of the franchise model of the aforementioned network, its structure and content have been reviewed and the present report has been prepared and compiled.
Definition of family business
For the term “family business”, the following definitions have been agreed by the International Family Business Network (FBN-International) and the European Community of Family Business (EFB):
A business that has one of the aforementioned definitions is called a family business.
According to the resolution of paragraph 8 of the minutes of the meeting dated 30/03/1402 regarding the approval of the board of directors for the membership of FBPA in the international family business network (FBN- I), the Iranian FBPA chose the aforementioned network as its strategic partner. and has started the process of applying for membership in it. It is expected that with the approval of this membership, it will be possible to access the body of knowledge and best international experiences, and all-round development will be provided to achieve the approved goals of FBPA.
Foreword
Definition of family business
executive summary
Table of Contents
3.1. Summary (goals, vision)
3.2. Key requirements for achieving the community vision
3.3. Staged development to achieve vision
5.1. Statistics and share of family business in the economy
5.2. Family business research: in Iran and internationally
5.3. Family Business Promotion Association (FBPA) of Iran
5.4. The target audience of the FBPA
5.5. Membership structure
5.6. Family needs in business
6.1. Values proposed by Iran FBPA to meet the needs of the beneficiaries
6.2. Best practice initiatives to support the needs mentioned in clause (5.3)
6.3. Code of conduct for participating families and third parties
6.4. Clients’ relationship
6.5. Distribution channels
9.1. International Family Business Network (FBN-International)
9.2. How Iran’s FBPA becomes a member of FBN-International
9.3. Other strategic partners
3.1. Summary
Aims
Providing protection and support needed to grow, transfer and learn from each other in multi-generational business families.
vision
We want to be the source and national umbrella and superior learning community for the development and sustainability of successful Iranian family businesses to achieve the following goals:
To
Family business owners, family members both active and inactive in the business and members of the next generation of the family.
By
Family Business Promotion Association (FBPA), as a non-profit, non-commercial and independent institution organized and directed by business owner families, and operates as the only official family business network in Iran, based on the approval of the board of directors dated 20-6 -2023 has requested membership in the International Family Business Network (FBN- I).
3.2. Key requirements for achieving the community vision
Stable support for families in Iranian family business will be achieved with the effective development and coordination of the following:
The existence of an association consisting of 25-member business owner families (in the first phase) who are committed to sharing knowledge and resources and are ready to encourage more business families to join and participate.
Providing exceptional educational programs for family business, relying on the best national and international experiences. Complemented by providing practical specialist knowledge to cover technical areas of interest to business owner families.
Development of national quantitative and qualitative research, modeled after the best international experiences, which can be effectively used by business owner families in a practical way.
A center for the accumulation and sharing of knowledge and expertise to coordinate and direct appropriate support to business families that request specific assistance.
3.3. Staged development towards the achievement of the Vision
For many families active in business in Iran, the specific problems related to family business and the availability of tried and tested solutions for these issues are unknown. Basically, these issues are caused by ownership and responsibilities related to them. These families have limited resources in Iran to refer to them for the confidential exchange of knowledge and to receive the best national and international experiences in this field. Some families occasionally use overseas support, while others use local company boards, professional consultants, and other bodies. However, none of these are specifically organized by the families themselves. considering that the stage of commercial and business development in Iran has matured enough to take the issue of ownership seriously and to start organizing families in business at the national level and to face the challenges of succession All families in the joint business should be taken care of.
We are committed to closing this gap in interaction with key business owner families in Iran. Our first priority has been to raise awareness of the need and create a founding board of five “founding families” to provide the basis for growth through seed investment, partnerships and entry fees. The next priorities include gaining a correct understanding of what Iranian family businesses currently need in terms of support and knowledge. Basically, we have raised and discussed three questions:
In engaging with families and strategic partners, we seek advice and input to build a “Coalition of Stakeholders” with like-minded families in business facing similar problems, issues and challenges. Many have already embarked on a path to address family governance and succession. Others may still be considering next steps. A key element to ensure the success of any family support will be the commitment, willingness and ability of the founding families (five families) to encourage other business families to join and participate. We are also looking to work with like-minded partners who have the talent to help us achieve our goal of benefiting families. These third parties include universities, advisers targeting families in business, government agencies and international groups and institutions that support families in business.
Our main goal is to create a “National Family Business Network” that will be recognized and participated in by people who intend to support it. FBPA is a safe space: we do not intend to become a place to “sell services” including professional consulting services or as individuals seeking to do business with family businesses. But we are interested in activating the market of support services for family businesses. We are pursuing the needs of the applicant’s family businesses for qualified professional consultants and facilitators.
5.1. Statistics and share of family business in the economy global
Family businesses generate 70-90% of global GDP annually. Family businesses constitute the majority (at least 60%) of all businesses. In most countries, at least 40% of family businesses are divided into only three sectors: production, construction and wholesale-retail sectors.
England
60% (3 million) of private sector companies in the UK are family owned. Together, they employ 9.5 million people, which constitutes 40% of private sector employment.
5.2. Family business research in Iran
To identify the demographic information of family businesses in Iran, we have prepared an RFP report (see attachment) containing a general description of the scope of work, specifications and information requirements of the family business community. Please comment on its appropriateness and correctness and if you agree, you are expected to answer the following questions.
In succession:
About the causes of tension in the family
Regarding conflict resolution
About “soft factors”:
How successful (or otherwise) the transition from one generation to another is based on soft factors – transparency of family governance, management of emotional issues and the emergence of leadership in families.
Regarding the impact on the economic and social affairs of the country
5.3. Based on international benchmarking, the following topics have been introduced as relevant areas of special concern
In the light of future cooperation, we hope to get suitable models regarding immigration, women, Philanthropy affairs, ownership and management of wealth and legacy, as well as an effective model of family governance and family business governance, …, and sustainable family business development models.
5.4. FBPA has the following features:
5.5. Target clients of the FBPA:
board members, CEOs, managers, inhouse advisors
5.6. Membership structure:
If we are to be successful, we need to attract a core set of families in the businesses who understand the importance of the proposed initiative and are prepared to commit time and, if necessary, resources to such an initiative. For this purpose and based on the provisions of the approved membership regulations of the FBPA, the structure of membership in the association is summarized as described in the following table:
note (1): The entry and the membership fees of official members are 100 million 50 million Tomans respectively.
note (2): Large official member businesses are required to pay excess amounts for more than 500 people in the amount of 300,000 Rials per person and up to 2,000,000,000 Rials.
note (3): The entry and the membership fees for non-official members are 10 million and 5 million Tomans, respectively.
note (4): At the beginning of each financial year, the entry and membership fees of official and non-official members will be determined and notified by the general assembly of the FBPA, taking into account the internal and external factors affecting the costing of the FBPA’s performance.
note (5): The list of 25 core candidate family businesses (official members) is attached.
5.7. Family needs in business:
To achieve the long-term sustainability of family business through effective succession, the needs of families in business can be examined in 10 key areas:
6.1. Iran FBPA offers the following basic values to meet the needs of its beneficiaries:
To realize:
For members.
6.2. Best practice initiatives to support the needs mentioned in clause (5.3):
International best practices point to a combination of support to meet the needs of families in business. However, to be effective over time, supports within the framework of the proposed values will be created around the following three areas:
6.3. Code of conduct for participating families
We, the members of the FBPA for the Promotion of Family Businesses, in order to realize the vision, mission and common organizational values of the association by taking advantage of the teachings and accepted ethical standards, put the following mission at the top of our agenda and strive to comply with it:
6.4. Clients’ relationship
6.5. Distribution channels
The organizational chart of the FBPA (based on the policy of a small and strong core and a large and effective network with the participation of volunteer members, strategic partners and qualified suppliers) is presented in the attachment.
In line with the expansion of networking, the FBPA will act in the following two ways:
Note (1): The management and cooperation method of branches and agencies will be provided
In franchising framework.
Note (2): Voluntary participation and cooperation of people with the required qualifications in
FBPA has the first priority.
domestic and international educational, research, consulting & events suppliers.
The strategic partners of the FBPA include:
9.1. International Family Business Network (FBN-I)
Based on the resolution dated 20-6-2023, the FBPA Board decided that FBN-I, headquartered in Lausanne, Switzerland, will cooperate with FBPA as a priority strategic partner within the framework of contractual requirements at the world-class.
FBN-I is the world’s only independent network of family business owners and their families, all committed to sharing experience and insight into family business-specific challenges in a confidential and open atmosphere. FBN-I members are present in more than 65 countries and currently there are 32 chapters (associations)located in countries around the world, which in total support more than 18,000 family business members from 4,200 family companies.
9.2. How Iran’s FBPA becomes a member of FBN-International:
9.3. Iran’s (Tehran’s) Chamber of Commerce,
9.4. Other strategic partners
Other strategic partners of Iran FBPA include national and international organizations and institutions that are interested and committed to the exchange of knowledge and specialized services. these partners are identified, evaluated, selected and invited to cooperate in the framework of bilateral or multilateral contracts and based on the requirements of common standards and considering the following criteria:
Renowned, interested and committed Iranian organizations and individuals who have the appropriate material and spiritual capacity can support the FBPA in the implementation of general programs as general supporters. Of course, in appropriate cases, the resources needed to carry out specific issues will be provided by distinct sponsors.
The document of the requirements, the amount and manner of cooperation and the benefits of sponsors will be prepared and presented subsequently.
According to the necessity, to provide effective solutions to meet the needs of the family businesses of the members of the FBPA and to solve their problems, the FBPA can provide the required services to real suppliers and competent and valid domestic and international experts and submit analytical and summary reports based on their feedback. These providers are included:
11.1. Individual suppliers:
11.2. Institutional suppliers:
publishing services,
The funds required by the FBPA are provided in the following ways:
13.1. Annual membership fee in FBN-I
In order for the FBPA to be a member of the international network and receive all the benefits, FBN-I will bill the Iran FBPA based on the following fee structure.
The costs have a fixed component that is the same for all member associations and a variable component that is calculated based on the number of member families.
For each association
For new member associations, a three-year transition period allows them to pay a lower fee. In total, about 50,000 Swiss francs should be paid for a three-year membership with 100 members in FBPA. The annual membership fee for the following years will be 20,000 Swiss Francs.
Voting right
According to the FBN-I Constitution, voting rights are based on the number of family businesses that a member association counts as members: 25 family businesses = 1 vote.
Minimum 1 vote for member associations with less than 25 members – maximum 6 votes for member associations that have reached the cap. Additional individual family members and dependent members are not considered in the calculation of voting rights.
Participation of all family members in all FBN-I events is free. A fee is charged for attendance at the FBN National Forum (Annual Conference) and for workshops held with accredited experts. The attendance of all next generation family members (18 to 40 years old) in
FBN Next-Gen events is free. A supplement is received for those who attend accredited workshops or courses.
13.2. Other key costs
yours
Saeed Jabr Ansari
Board member and CEO
Family Business Promotion Association (FBPA)