By Rob Starr, Content Manager, Big4.com
According to PwC’s latest Global Family Business Survey, 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. Companies are also feeling more optimistic about their future based on internal factors.
Seventy-six percent of US family businesses say they plan to hand the reins to the next generation, the highest percentage since 2007, when US companies first participated in PwC’s Global Family Business Survey, and a significant increase from the 55 percent reporting the same two years ago. Still, just over half of family business leaders (52 percent) intend to transfer both ownership and management of the business to family members.
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.
Alfred Peguero, PwC’s US Family Offices Services leader comments:
“We’ve noticed an attitudinal shift among many US family businesses in the past two years,” he says. “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.”