US family businesses “have gone from warily eying their next big bet to actively seeking business growth opportunities”, according to PwC.
The comments on 7 January came as the group released its US companion report to the PwC Global Family Business Survey. The report found that 93% of US-based respondents felt ready to capitalise on new opportunities in their immediate business environment, compared to 81% of respondents elsewhere in the world.
PwC's US family offices services leader, Alfred Peguero, said: “Companies recognise now more than ever the need to out-innovate their competitors and seek new avenues of growth in order to thrive in a fast-evolving business landscape.”
More than 80% of respondents expected to grow steadily over the next five years – showing “greater appetite for actively investing in growth initiatives”, according to PwC.
They were increasingly looking to international markets; 47% had started breaking into new markets abroad, while 54% of companies operating solely in the US said they "expected to be selling internationally in the future". This was a marked increase on two years ago when only 30% of firms operating solely in the domestic market reported international expansion plans.
However, the respondents weren’t confident on all fronts. Similar to Family Enterprise USA’s 2013 findings, PwC found the wider economic challenges dominating US political debate was the greatest concern for 68% of the 100 US-based family businesses questioned.
Furthermore, strong competition and the problem of finding suitably skilled workers were cited as the biggest day-to-day challenges for family businesses at 61% and 52% respectively. Peguero added: “The talent shortage in particular has been a persistent challenge for companies, as we’ve seen in the past three consecutive surveys.”
The pace of technological change was also seen as a problem; 39% of respondents said the need for new technology would present a problem in five years time. While advances in technology have helped smaller family businesses to compete more effectively with larger companies, the report said: “To continue reaping these benefits, family businesses will need to keep pace with and effectively harness new technology that emerges in the coming years.”
The issue of succession – a perennial problem for family businesses – was also cited, with 50% of respondents voicing concerns that potential successors did not have the "required drive and aptitude to steward the business into the future”.
Peguero said: “Future leaders of family businesses will need to be prepared to pursue opportunities in faster-growing markets, develop new products and explore alternative business models to stay relevant and ahead of competitors.”