Romanian entrepreneurs are more cautious than their global counterparts: 75 percent of the respondents aim to develop their business over the next five years, compared to 85 percent at global level. Moreover, almost three quarters (74 percent) of family businesses in Romania registered an increase in turnover over the last financial year, while at the global level, 65 percent of family businesses had similar turnover increases, according to this year’s edition of the PwC Family Business Survey.
„Family businesses learned to navigate through murky waters and are beginning to think long-term, since the need for innovation becomes their top concern, while in the previous edition of the survey the general economic situation was considered the main threat,” Alexandru Medelean, Director, Leader of the Private Company Services Team, PwC Romania commented in a press release.
Also, 62 percent of the Romanian respondents are expecting a constant growth of the business over the next five years, while 13 percent are betting on an accelerated and fast development. The results are similar to those of the previous edition of the study.
When asked which the most important three challenges within the company are in the next 12 months, Romanian respondents argued that they are first of all concerned about attracting key talents (49 percent, a ten percentage points increase compared to the previous edition). Romanian entrepreneurs are also more concerned about the reorganisation of the company than entrepreneurs at global level (39 percent versus 28 percent).
Business and product portfolio development are major challenges for more and more entrepreneurs. Both in Romania and at global level, approximately a quarter of the respondents (23 percent, and 25 percent respectively) mention this, an increase in comparison to the previous edition of the study (6 percent in Romania, 10 percent at global level).
When asked about the most important three external challenges over the next year, most entrepreneurs mentioned market conditions and Eurozone uncertainty (56 percent), government policies and regulations (38 percent) and fierce competition (28 percent).
Romanian family businesses owners also mention the need for constant innovation, the general economic context, market instability, attracting key talents, fierce competition and accelerated globalisation as the main challenges for their companies over the next five years.
The survey reveals other major concerns of the Romanian family businesses. Succession planning can have a major effect on the company. There’s a „family factor” dynamic seems to be ignored by family businesses for now. One of these main aspects is approaching succession issues. Also, family businesses in Romania argue that it’s harder to be competitive in the present economic context and are aware of the need to keep up with changes in a more liquid and disruptive environment where innovation is key, but the skills availability is limited and competition is becoming ever more aggressive.
„Romanian family businesses are going through one of the most important stages of their evolution from 1989 to the present day – the transfer to the second generation. This stage will either end in keeping the business in the family (transfer to the second generation), either the family will lose control of the business through an exit or even, unfortunately, some companies will disappear. The proportions of these transformations are almost impossible to anticipate, however, we will have both success stories and also dramas. From this perspective, both the costs and the benefits of this process will impact the business founder’s wallet and, thus, must be approached with great care and responsibility” Ionu? Simion, Partner, Leader of the Tax Services for Family Businesses Team, PwC Romania argues.
The PwC survey regarding family businesses took into account companies with a USD 5 millions or higher turnover. Over 2,378 semi-structured interviews were conducted over the phone or via online questionnaires with stakeholders (owners and CEOs) within family businesses in over 40 countries around the world, in the third trimester of 2014 by Kudos Research, London.