ECONOMY

Family firms increasingly consider resorting to help from outsiders

Three in seven family enterprises in Greece expect an ownership change, while two thirds of them say they would appoint a CEO outside the family in case of a management change, a PricewaterhouseCoopers survey says. Still, half of the company heads believe the family’s next generation will take over as owners. This pan-European survey reflects the pressures which family companies, most of them small or medium-sized, undergo because of international competition. One in 10 family company managers expects an ownership change in the next two years; in the long-term that goes up to 32 percent. A similar trend emerges in family businesses across Europe. The consultancy firm notes that it is important for family enterprises to draw up a succession plan, which will secure a smooth transition with the smallest possible tax burden. One of the toughest challenges in a family company’s transition to the next generation is the equal distribution of wealth between the members of the next generation. Some 57 percent of family enterprise owners said they possess sufficient wealth to secure fair treatment of all family members, whether they participate actively in the company or not. One in four owners has considered separating the company’s assets for the purposes of succession. The most successful family enterprises in Europe «recognize the double impact of succession on management and ownership.» In Greece, 54 percent of companies say they would use business consultants to assist in the process of management succession. Besides the issue of succession, respondents to the survey set among the main financial challenges the issue of cost control (with 78 percent considering the main priority), the improvement of cash flow (58 percent) and the funding of the corporation (36 percent). In terms of more general goals, answers centered on the development of business strategy (71 percent), the hiring and maintenance of staff (27 percent), and the planning of succession at higher managerial level (22 percent). The greatest obstacles in developing family enterprises, according to the survey, are recruitment (for 64 percent of owners), bureaucracy (50 percent) and the unstable tax environment (50 percent).