Nearly three-quarters (71%) of Irish family businesses expanded over the past year by comparison with 64% of their global peers, according to a new  PwC global survey of over 2,800 family business in 50 countries including Ireland.

Ninety one percent of Irish family businesses plan to expand (Global:85%) and around one in six have consistently claimed over the last six years that they plan aggressive growth.

However, the report warns that family businesses’ growth outlook could be curtailed by the organisation’s own lack of strategic planning rather than economic factors or other external concerns.

In fact, many issues now facing family businesses come back to a lack of strategic planning – the ‘missing middle’- including having a strategic plan that links where the business is now to the long-term and where it could be. This results in many families not being able to turn early promise into sustainable success. For example, In Ireland our surveys tell us that since 2012 around one in six family businesses are not achieving their growth ambitions.

While some family firms are managing strategic planning well, many are caught between the deluge of every day issues and the weight of inter-generational expectations.  PwC found that in survey to survey, areas such as succession, diversification, digital, cyber security and innovation are not being tackled as well as they could be.

In two successive surveys, family businesses in Ireland have made on average around a quarter of their sales overseas with ambition to raise that to almost a third. Yet international sales still remain at 25%. At the same time, an overwhelming majority (94%) of those planning to grow aggressively plan to grow their business in existing markets in the next five years with less than half (44%) expecting growth in new countries.

With Brexit being front of mind for many business leaders,  82% of responding Irish family businesses  expected the exit by the UK from the EU to have a negative impact on their business over the next two years (UK: 38%; Global: 15%).  Nearly a quarter (24%) reported having already taken measures as a result of the UK vote to leave the EU, and a further 35% are planning to take measures.

PwC Ireland Family Business Leader, Paul Hennessy said, “It is clear that family firms are a vital part of our economy and are a key driver of job creation and growth.  Overall, the performance of Irish family businesses and outlook for growth remain strong.  There has been some progress on succession planning, but less so on strategic planning.”

He added, “Having ambition to grow, without a strategic plan of how to get there, is just an aspiration. Not only is it limiting their ambition to expand and grow, it could also expose them to additional risks for which they have not effectively planned.”

Article Source: Business World