Swa.co.id – Nearly two-thirds (64%) of family businesses recorded growth in the past year. Even though world economic conditions are still experiencing uncertainty. This was reported by PwC in a new global survey of 2,800 family businesses in 50 countries the family business sector.
To have ambitious plans and plans for business growth over the next five years despite the global economic. Slowdown, with only one in five family businesses reporting a decline in sales in the past two years. Family businesses in Asia Pacific are the most ambitious, as 21% of them plan Family Business Growth.
The fastest and most aggressive growth
Michael Goenawan, Entrepreneurial and Private Clients Leader from PwC Indonesia, said. That family businesses in Indonesia are also optimistic regarding growth prospects in the coming year, with their plan. To focus on main businesses in existing markets by expanding into new business areas or markets. . “Family businesses in Indonesia also recognize the important role of digitalization and its benefits to their business,” said Michael in his written statement.
Meanwhile, family businesses in Western Europe
North America have lower ambition in planning for fast and aggressive business growth (10% and 12%, respectively) as respondents in these regions predominantly predict stable economic growth. Globally, 15% of respondents plan for rapid and aggressive growth and 70% of respondents plan for steady growth over the next five years.
In the short term, respondents said Brexit had no effect on their business growth plans (only 15% of global respondents said Brexit would have a negative impact). The level of concern about the impact of Brexit over the next 1-2 years is at its highest in the UK (38% – more than double the global average of 15%) and among EU countries (22%). Globally, 83% said they did not plan to take special action because of Brexit.
Although growth is expected to be stable, PwC warned that the growth.The family business could be hindered. By a lack of strategic planning within the company compared to economic factors or other external factors. In fact, many problems faced by family businesses are now caused by a lack of strategic planning (‘the missing middle’). Namely a strategic plan that links the current business position and the long-term aspirations or potentials where their business should be located. As a result, many family companies that are unable to continue successful.
Business become sustainable successes
Some family businesses have been able to manage strategic planning well. But many of them are stuck in operational issues and differences. In expectations between the early generations and future generations of the family business. PwC also found that from several surveys that had been conducted, aspects related to succession.
Stephanie Hyde, Global Entrepreneurial & Private Business leader, PwC, said that family enterprises will remain a vital part of the world’s economy due to their contribution to GDP and large job creation in various countries.
Prospects of family companies will remain strong due. To the business professionalization stage that has been carried out. But unfortunately strategic planning has not been carried out properly. Without strategic planning, high business growth ambitions will only become aspirations.
In three consecutive surveys, the family business
Average about a quarter of sales abroad with aspirations of increasing it to one-third of total sales. Unfortunately in every survey, the realization of international sales is still hovering around 25%. One in three family businesses still operate in only one sector and in their home country and about 80% of family businesses plan. To start exporting their products within the next five years.
Some of the main challenges identified by respondents (more than 2,800 businesses in 50 countries) related to their strategic planning:
Finance: One-third said it was increasingly
For them to access capital (32%) compared to non-family business enterprises. Three-quarters (76%) said they would use their own capital to fund growth
- Inheritance: Only 16% of family businesses have a succession process that includes senior executives, 43% have no plans at all
- Innovation: 64% chose innovation as the main challenge in order to stay ahead for the next five years
- Digital: 47% chose the problem of digital applications and new technology to be their main challenge. But only a quarter thought their business was vulnerable to digital disruption
- Professionalization: three out of five respondents said. They would hire professionals who are not family members to help run the business
- Skills: 58% said their ability to attract and retain employees with suitable skills is a major challenge. Over the next five years. Nearly half believe they have to work harder than family non-business firms to recruit / retain good human resources (48%)
- Finance: One-third said it was increasingly difficult for them to access capital (32%) compared to non-family business enterprises. Three-quarters (76%) said they would use their own capital to fund growth
- Geopolitical concerns: The majority of family businesses identify political and economic stability. As more important than potential growth when considering new export markets