By Rob Starr, Content Manager, Big4.com
US family businesses are more confident about their growth prospects than their global peers – 93 percent versus 81 percent – and are poised to capitalize on new opportunities, according to PwC’s latest Global Family Business Survey. While economic challenges top the list of near-term concerns for US family businesses, with 68 percent citing market conditions as a main issue over the next 12 months, such concerns have waned since the prior survey two years ago (at that time, 88 percent flagged market conditions), suggesting that family businesses have adapted to the new normal of market volatility and economic uncertainty.
Family businesses are taking a more conservative approach to strategic planning, with most (82 percent) expecting to grow steadily over the next five years, while only 11 percent of businesses expect to grow quickly and aggressively. Family-owned companies are nonetheless showing a greater appetite for actively investing in growth initiatives, compared with two years ago, focusing on areas such as innovation and international expansion.
Family businesses’ emphasis on the need to out-innovate peers to ensure the long-term viability of their companies has clear implications for succession planning. While the majority (58 percent) of US family businesses cite the need to continually innovate as a top challenge over the next five years, nearly as many (50 percent) voice concern that their potential successors do not have the required drive and aptitude to steward the business into the future.
“We’ve noticed an attitudinal shift among many US family businesses in the past two years,” says Alfred Peguero, PwC’s US Family Offices Services leader. “They’ve gone from warily eyeing their next big bet to actively seeking business growth opportunities. Companies recognize now more than ever the need to out-innovate their competitors and seek new avenues of growth in order to thrive in a fast-evolving business landscape. Fortunately, family businesses inherently have the entrepreneurship that is needed to keep pace in the global economy. Their challenge is fostering the same entrepreneurial spirit in future generations.”