PwC Survey Predicts Good Show by Family Businesses
Thiruvananthapuram: Eighty-nine per cent of family businesses in India are expected to grow in the next two years, with 44 per cent of them looking at growing quickly and aggressively and the rest expecting a steady growth, finds PricewaterhouseCoopers (PwC India) Family Business Survey 2019: Powerhouses of Opportunity.
Fifty-eight per cent of family businesses have achieved double digit growth in the last year compared to global figures of 34 per cent
Fifty-eight per cent of them have achieved double digit growth in the last year, which is significantly encouraging when compared to global figures of 34 per cent. Increasingly, a lot of Indian family business owners are also looking at private equity/venture capital funding and in certain cases listing all/part of their business on stock exchanges and exploring private placements.
The survey also reveals that Indian family businesses are increasingly looking at diversification and exploring newer markets to fuel their growth ambitions. Seventy-eight per cent of Indian family businesses currently export their goods or services and 89 per cent of them plan to do so in the next five years. Over the next couple of years, 64 per cent businesses expect to make major inroads in terms of their digital capabilities and 63 per cent of companies are looking at bringing in experienced professionals to help run the business. However, as businesses expand, they will need to navigate continuous challenges. Even as companies look to professionalise, 43 per cent of family businesses feel that access to skilled talent is a major challenge while 54 per cent of businesses see the need to innovate to stay relevant. Economic environment, digitalisation, regulatory concerns and cyber security threats are some of the other challenges cited by business owners.
On the occasion of the launch of the survey, Ganesh Raju, Leader – Entrepreneurial and Private Businesses, PwC India said, “Indian family businesses, be it the large conglomerates or mid-sized businesses, face interesting times today. The mega trends shaping the economy, disruptive technologies and changes in the overall business ecosystem bring in both challenges and opportunities to the table. It’s interesting to see how business owners are moving away from traditional approaches of doing business, exploring new markets, diversifying into new segments, embracing technology and opening up to newer avenues of funding. However, more and more business owners need to better appreciate the impact of digital disruption on their businesses and treat the company’s ‘digital needs’ as an enabler of business growth.”
The survey, which covered 2953 family businesses globally, including 106 from India, found out that 89 per cent of family businesses in India have a clear sense of values and purpose as a company. This can be attributed to the strong Indian family value system and a belief that values are the foundation on which family businesses are built and the biggest differentiator for growth. However, what is missing is that Indian businesses do not have a documented value and purpose statement in place which would help in maximising returns.
The PwC Family Business Survey also shows that 73 per cent of Indian family businesses have the next generation working in the business and 60 per cent plan to pass on management and/or ownership to the next generation. However, only 21 per cent have a strategic, documented and communicated succession plan in place. The survey also shows that 89 per cent of Indian family businesses are engaged in philanthropic activities. This is much higher than the global average of 68 per cent.