European Family Business Survey | KPMG | AU
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Australian and European family businesses: same goals, differing challenges

European Family Business Survey

Europe’s family businesses are confident about the future but must become more agile, innovate faster and attract top talent to remain competitive and continue to grow.

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These are among the key findings of the latest European Family Business Barometer which surveyed 1,576 family business executives in 26 countries across Europe, published by KPMG Enterprise and European Family Business (EFB).

And according to KPMG Enterprise Partner Bill Noye, who has advised family businesses for over 30 years, these findings echo many concerns of the Australian family business sector.
 

Highlights

  • 73 percent of respondents report that they are confident or very confident in their family business’ economic prospects over the next twelve months. 
  • While overall confidence is up across Europe, the UK was a notable exception, with confidence dropping from 83 percent in 2017 to 68 percent this year. With Brexit negotiations ongoing, UK family businesses are looking to the future with caution. 
  • 64 percent of total respondents reported increased turnover over the past year. Only 11 percent of respondents reported decreased turnover in the past twelve months.
  • Improving profitability (49 percent); increasing turnover (38 percent); and attracting new talent (27 percent) are the top three priorities for the next two years.
  • The war for talent was ranked as a top challenge facing family businesses. This year 53 percent of respondents identified this as one of their top three concerns. This compares to 43 percent in 2017 and 37 percent in 2016. Other top challenges this year included the increased cost of labor (36 percent) and political uncertainty (36 percent). 
  • International expansion is being postponed. In this year’s survey, only 36 percent of respondents said they had increased their activities abroad over the past year – compared with 44 percent in 2017 and 65 percent in 2016.
     

The Australian Perspective

According to research into family business conducted by KPMG Enterprise in 2018, the top financial objectives of family businesses were the same as Europe’s in term of sales growth, profitability and profit margins, and return on investment.

  • Regarding the domestic future growth outlook, nearly 60 percent of Australian family businesses anticipated growth. 
  • In the international market, around 50 percent anticipated growth.
  • When it comes to future growth, respondents indicated that top threats are the increasing costs of doing business, changing consumer preferences and purchasing behaviours, and the entry of new competitors into the market. This echoes the European statistics, but despite the volatility of Australia’s political landscape over the past few years, political uncertainty was not cited as a reason for concern.
  • In Australia, rather than a war for talent, of greater importance is the alignment of family members and successive generations to the family business vision.

Bill Noye says: “Families with a shared understanding of the future of the business and its future growth and who build strong communication frameworks both within the family and the business, are more likely to succeed into the long-term.

“It is fundamental for families to have a shared understanding on leadership and ownership strategies and transition plans, or people may lose their connection to the business. Focusing on training, mentoring and developing the next generation to be prepared for leadership is absolutely critical to overcome that concerning lag in self-confidence.

“Finally, governance frameworks for the future must be put in place to ensure the interests of the family and the business are secure and understood by all involved.”
 

For further information

Dina Ross
KPMG Enterprise
0428 434 089
dross3@kpmg.com.au
 

About the Barometer

The European Family Business Barometer is based on the responses of an online survey from over 1,500 questionnaires which were received from family businesses across 26 European countries from 7 May to 7 July 2018.

About KPMG Enterprise

KPMG Enterprise is a division of KPMG Australia whose prime objective is to help the mid-market fulfil its business objectives and ambitions. KPMG Enterprise works with established entrepreneurs, business owners, family businesses, not-for-profits, local government, startups and fast-growing, dynamic companies to build great organisations. It offers an extensive range of audit, tax, accounting and advisory services to help clients through every stage of their life cycle, whether starting, growing or exiting their businesses.

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