Whether it’s a first-generation start-up or a dynasty that has operated in South Africa for decades, family businesses make up the heart and soul of South Africa’s economy.
In fact, family businesses contribute an estimated 70% of the global GDP and are outperforming their non-family counterparts.
Leading industry professionals and family business owners recently converged at KPMG’s third annual Family Owned Business conference at the Oyster Box hotel in Umhlanga. The well-attended, interactive workshop, provided delegates with actionable insight, necessary when planning for a smooth transition of family businesses.
The two-day conference was jam-packed with learning and networking opportunities with a key focus on succession planning, governance and creating a culture of innovation in this generation and the next.
“It was fantastic to see family business owners back this year to reinvigorate their business processes and strategies as well as plenty of fresh faces engaging with this pinnacle event of the family business sector,” says Alan Barr, KPMG’s head of Family Business in South Africa.
Barr, along with his colleague, Christophe Bernard – KPMG’s Global Head of Family Business, unpacked the latest European Family Business Barometer, revealing insights into how the European family business community perceived its growth prospects and business performance as well as confidence levels and challenges faced. The European Family Business Barometer, the fifth of its kind, is based on the results of an online survey. In total, 959 completed questionnaires were received from the period May 01 to June, 30, 2016.
These findings were for the first time compared to family businesses in South Africa.
“Family businesses in South Africa have demonstrated strong resilience to external pressures and challenges and are optimistic about the future,” says Barr. “To grow their business, company leaders are investing to two areas: core business and diversification.”.
At least 73% of the respondents surveyed in South Africa were confident about the future despite the political uncertainty and unstable currency. A further 83% of family businesses plan to grow turnover next year.
Barr says that it was reassuring to see that, despite the sluggish economic growth and recent nervousness within the European market, the family businesses surveyed remained confident and optimistic about their outlook for the future.
“They are increasing their sales figures, entering new markets and growing their workforce,” he adds.
However, although they remain optimistic, there are still major challenges inhibiting their growth plans.
According to Barr, the top four concerns in South Africa were identified as: political uncertainty (68%), unstable currency (37%), increased cost of labour (27%) and “war for talent” (27%)