65% of Canadian family businesses are confident their strategy meets the needs of the digital age
TORONTO, Nov. 16, 2016 /CNW/ - Despite economic uncertainty, almost two thirds (64%) of family businesses have grown over the past year, according to the PwC 2016 Global Family Business Survey. While Canadian family businesses are confident about the future, the biggest concern on the minds of family business leaders is a lack of focus on strategic planning to ensure future growth. The majority (95%) of Canadian family businesses say that securing their long-term future is key to success in the next five years. However, most companies are too focused on day to day operational activities to plan for the future.
The concern centers around what the Global Family Business Survey calls "the missing middle". This is the strategic plan that should bridge that gap between the everyday requirements of running a family business and establishing long-term goals to ensure the business is evolving and taking steps to move towards those goals.
"Many family business owners we've spoken with enjoy success today but when it comes to creating future opportunities, they are averse to risk and reluctant to move away from the status quo." says Saul Plener, Partner and National Leader, Private Company Services. "A willingness to diversify, innovate and evolve to meet the needs of a rapidly changing market is the only way to for Canadian family businesses to remain competitive and stay viable over the long-term."
The key challenges over the next five years for family businesses in Canada are:
- The need to innovate
- Dealing with increased competition
- Attracting and retaining talent
- General economic climate
"To ensure the next generation of entrepreneurs, companies must innovate in their respective sectors. The hard-fought race to the next innovation simply reaffirms how important it is for family-owned businesses to seize opportunities while embracing bold strategies and fostering a culture of change," says Sonia Boisvert, Partner and Leader of Family inc.. "More and more, the next generation is looking not only for success, but also for fulfillment. These entrepreneurs love a challenge as they seek out unique experiences. This should be taken into consideration when calling on the next generation to meet new challenges."
The report identifies three key themes that Canadian family businesses must consider to ensure success for future generations.
Of the 74 Canadian-run family business respondents, 89 % expect to grow over the next five years. Of those, 81% (vs 72% globally) will earn a majority of revenue from the same products/services; 45 % (vs. 54% globally) will establish new entrepreneurial ventures, but only 12% (vs 44% globally) would consider expanding to new markets.
According to the report, 65 % of Canadian family businesses are confident their strategy fits the digital age. However, the Next Generation survey found that 37% struggle to get the business to understand the importance of a clear digital strategy and 29% felt their family business was slower to implement technology advances.
Legacy: Succession planning
Securing the future of family businesses over the long haul remains a key goal. Passing on management to the next generation is still important to 38% of respondents (vs. 39% globally), a decline from 53% in 2014. Taking action on a documented succession plan can be very emotional for a family business owner amidst concerns around managing involved family members' interests while ensuring the future success of a business they are heavily invested in.
The full Global Family Business Survey report is now available and can be found here: www.pwc.com/ca/en/private-company/family-business.html
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