Less than half of family businesses expect Covid-19 to hit sales
Global survey from PwC also finds most are optimistic about withstanding the challenges
Some 62 per cent of respondents described their digital capabilities as ‘not strong’. Photograph: iStock
Less than half of family businesses globally expect sales to fall despite the Covid-19 pandemic and most feel optimistic about their abilities to withstand the challenges and continue to grow in 2021 and 2022, according to a new report from PwC.
In a year where business has had to transform the way it meets the needs of society and the environment, global family-owned businesses risk falling behind, according to PwC’s 2020 NextGen survey of 2,801 family business owners, including Ireland.
While more than half (55 per cent) of respondents saw the potential for their business to lead on sustainability, only 37 per cent have a defined strategy in place. European and American businesses are lagging their Asian counterparts on this issue.
In Ireland, the survey highlighted that a third of respondents did not perceive any change was needed to their family business sense of purpose. It noted that this was “surprising in a time of such uncertainty and challenge”.
The survey suggested family businesses have weathered the pandemic relatively well. Some 46 per cent expect sales to fall despite the pandemic and businesses felt optimistic about their ability to withstand and continue to grow in 2021 (64 per cent) and 2022 (86 per cent).
Even though 80 per cent of global family businesses adapted to the challenges of the Covid-19 pandemic by enabling home working for employees, there are also concerns about their overall strength when it comes to digital transformation.
Some 62 per cent of respondents described their digital capabilities as “not strong”, with a further 19 per cent describing it as a “work in progress”.
While global family businesses report good levels of trust, transparency and communication, just a quarter stated they have a family constitution or protocol, while just 15 per cent have established conflict resolution mechanisms.
Mairead Harbron, director, PwC Ireland entrepreneurial and private business practice, said family harmony “should never be taken for granted”.
“It’s something that must be worked on and planned for, with the same focus and professionalism that’s applied to business strategy and operational decisions,” she said.
“In Ireland, the survey found that almost all (98 per cent) respondents said that professionalising and modernising management practice should be a clear focus for the business.
“However, one third (33 per cent) admitted that the governance rules in their family business prevented them from having the impact they would like within the business.”