Monday is Family Day here in Merchant Advance Capital's home province, and so we at the blog thought it would be an interesting occasion to reflect on some issues relevant to family-owned and run businesses across Canada. If you're taking the day to relax and be with whoever's closest to you - enjoy! If not, read on for some fascinating insights.
Professional Services firm Price Waterhouse Cooper released their global Family Business survey earlier this month. A fascinating and extraordinarily deep look into the statistics surrounding family-owned businesses in the United States as well as in the world beyond, the survey raised some very insightful points for the perusal of anyone who has overseen a business that has passed (or may one day pass) from generation to generation. For access to the full data portal, visit PWC's page here. Some of our favourite observations are below:
- 67% of family businesses in Canada have experienced sales growth over the past 12 months.
- 85% are looking to grow over the next five years.
However...
- Only 20% of Canadian family businesses have a robust, documented succession plan in place.
This statistic stands out in stark contrast, given that the survey also indicates that 16.2% of global respondents (the highest percentage of those surveyed) feel that their key priority is to ensure a long-term future for their company.
PWC's study identifies two competing "head and heart" forces that affect the decision-making process of family businesses. The need for professionalization and forward-looking development is contrasted with the emotional, historical context that may effect the transition of a business from one generation to the next. The study indicates that it would be wise for family-owned businesses to plan early, and thus avoid conflict at key transitional moments.
