Research: Family businesses going strong

G

ood news for the family firms around the world: Family businesses are going strong.

That was the key takeaway from two separate family business surveys from PwC — a big survey that combined responses from more than 2,000 family-owned companies in 82 countries and a smaller effort that combined responses from more than 80 family businesses in the United States alone. Results for both studies were released in late May 2023.

Specifically, 71% of family businesses responding to the 11th annual Global Family Business

Survey reported growth in their latest financial year, with 43% reporting double-digit growth and 77% saying that they expect to grow in the coming two years.

In the 2023 U.S. Family Business Survey, 86% of respondents said they expect to see growth in the next two years.

Other important data points from the U.S. survey:

• 98% of responding family businesses have some sort of governance structure in place, while 66% of respondents said they have a “clear” governance structure in place.

• 39% of survey participants said they have “strong” digital capabilities overall, and 40% said they are “very advanced” in responding to and addressing data privacy breaches.

• 30% of respondents agreed that contributing to solutions for society and the environment is important for longer-term goals.

• 26% of the family businesses surveyed have only family members on their board of directors.

Trust also was a big issue in the U.S. survey. While 72% of responding family businesses said they believe it's essential for customers to trust the companies they patronize, only 52% of respondents said they feel their customers trust them, and just 44% said they believe their employees do.

Succession planning was also addressed in the U.S. survey.

Roughly 78% of respondents said that protecting the business as the most important family asset was their top long-term goal for the next five years, and 72% said they want to ensure the business stays in the family.

Interestingly, in 2021, the last time the U.S. survey was conducted, only 34% said they had a robust succession plan that was documented and communicated to stakeholders.

Finally, family business members who responded to the 2023 U.S. Family Business Survey overwhelmingly deemed giving back to the community as important for both short-term marketing and long-term success. Case in point: About 81% of respondents said they are contributing to their local community.

Communicating social responsibility to the public and employees also appears to be key: 81% of respondents said they have a clear company purpose and 72% said they actively communicate their purpose internally.

The takeaway: Doing good is a vibe for publicly traded companies and family businesses alike.