European Family Businesses (EFB) and KPMG launched the fourth edition of the European Family Business Barometer, which seeks to measure the confidence levels of family-owned businesses across Europe. This year, the clear message is that European family businesses continue to be highly optimistic about the future and despite the challenges, they are focused on pursuing new business opportunities in order to continue growing their business.
Two years after the release of the first European Family Business Barometer, the number of companies who are optimistic in their forecasting has reached 75 percent. Though the survey shows an overall confidence across businesses of all sizes, small companies are slightly less optimistic than the large ones: while 66 percent of small companies express a positive outlook for the future of their business, this rises to 81 percent among large companies.
Although the performance indicators are positive, increased competition (37 percent) is now leading the list of major challenges for European family businesses. Unsurprisingly, the ‘War for Talent’, an increasing trend over the last 2 years, continues to be a big influence on future success.
European family businesses are well aware that employing the right people with the right skills is key to their success, and 33 percent of them are concerned about their company’s capability to compete, recruit and retain skilled staff. In 2013 this issue was not even ranked in the top five challenges, however last year it moved to number two where it remains. This may be a warning sign for some businesses, as difficulty to compete for the best talent may pose limitations for the future performance of European family businesses’.
The survey also reveals that European family businesses are thinking about their long-term strategic future. This year 41 percent of the surveyed companies are planning a strategic change in the next 12 months; of this group, 26 percent plan to pass their management to the next generation and 20 percent plan to pass on their ownership to the next generation, first and third choice respectively in the ranking of envisioned changes. These figures are consistent with the results of the previous editions and confirm that the drive to transfer the business to the next generation is still highly important for European family businesses.
Overall, the findings of our survey reflect the rise in European family businesses confidence in the future, and the positive trends in all of the major business performance indicators confirm these improved results. With 58 percent of respondents reporting that their turnover has increased, 26 percent indicating that they have maintained turnover, and only 16 percent reporting decreased turnover(half the number of 2 years ago), the future for the majority appears bright.
The European Family Business Barometer is based on the responses of an online survey from over 1400 questionnaires, which were received from family businesses across 25 European countries. This fourth edition took place from 1 May – 5 July 2015.
The report brings insights on the confidence levels of family businesses across Europe, the challenges they face and the changes they need to overcome.
Find out how the European Family Business Barometer results compare with the Australian Family Business Survey 2015.