What does ‘professionalising the business’ mean for the family firm? It’s about giving structure and discipline to the vision and energy so often exhibited by the entrepreneurial family business. This helps them innovate better, diversify more effectively, export more and grow faster. The family business segment remains resilient and dynamic even though the post-recession economic environment is proving tough and there are continuing pressures in relation to skills shortages, innovation and governance. Family businesses believe they play an important role in the economy and society, including job creation and adding stability to a balanced economy.
74 percent of family businesses in Romania state that they registered growth in the last financial year, yet local entrepreneurs are more cautious than their global counterparts about the future, being concerned mostly about the economic environment and the sharpening competition, according to the latest edition of the PwC Family Business Survey. 62 percent of Romanian respondents expect a constant growth of their business in the next five years, while 13 percent aim for a rapid and aggressive growth. The constant need to innovate, market instability, attracting and retaining talented employees, increased competition and globalization are mentioned as the most important challenges for family businesses in Romania.
Family businesses must adapt faster, innovate sooner and become more professional in the way they run their operations if they are to remain successful. These are just some of the findings of the latest PwC survey of 2,378 family business executives in more than 40 countries worldwide, including Romania.
Investing in a candy store
An example in this sense is the business of a young family, Laura and Radu Beligar, in the city of Cluj, with no experience in the trade field. They have accessed the government program through which the state grants up to EUR 10,000 for those who want to develop a business. Out of the EUR 30,000 investment in a candy store, they spent most of the money on fitting out the location, on furniture, equipment and stock merchandise. As regards the products sold in the store, most of them are from Europe and the entrepreneurs deal themselves with a good part of the packaging and presentation.
“This is our first adventure in entrepreneurship. The shop idea came up after I remembered the feeling of joy that I felt every time we entered into a candy store abroad. We wanted to bring this experience in Cluj too; not necessarily the goods out there, as much as the feeling you get when you step in such a store. Me and my husband have started this project, and over time a good friend joined us,” Laura Beligar said.
More competitive, more volatile
Overall, this year’s PwC survey indicates that – despite a tough economic environment, with pressures around skills shortages, innovation and governance – family firms remain dynamic and resilient. Indeed, family businesses account for 70 – 90 percent of GDP globally, and are a barometer of the health of the economy.
In general, family businesses are in reasonably good shape, with 65 percent reporting growth in the last 12 months, and 70 percent expecting to grow steadily over the next five years. 15 percent are seeking aggressive growth, compared to 12 percent in 2012. Growth ambitions are particularly strong in China (57 percent), the Middle East (40 percent) and India (40 percent).