Key priorities for Family Business Owners
Study shows an increased focus on legacy, asset protection and succession.
Recent survey data from the Deloitte Private Company 2020 report highlights a substantial change in focus for family business owners. The insights are also strongly supported by anecdotal evidence from our clients who are mostly mid-market (turnover between 5 million and 100 million) business owners who are typically baby boomers in family businesses. Survey respondents listed their strategic focus areas as follows:
The above graph indicates an increased focus on longer-term strategic outcomes and a reduced focus on wealth creation and growth. Let’s face it, many baby boomers are already fairly well off and so they can afford to focus on other priorities. Increased focus on legacy is a common theme we see with mid-market baby boomer business owners. They are very keen to leave a legacy, look after their stakeholders – suppliers, customers and employees – and are focused on ensuring the business continues successfully after they have exited.
The high percentage of respondents looking at succession and governance indicates this, leading to not only a more effective family business succession but also a more sustainable business in the long run.
Alarmingly, the same survey shows ongoing short-termism amongst business owners: a focus on short term planning and tactics that is a long way from being strategic and accomplishing the key outcomes highlighted above. 6% planned for the next 12 months, 37% planned for the next 2-3 years and 34% planned for up to 5 years. This leaves just 23% thinking beyond the 5 years. I regularly encourage (harass and cajole) our clients to think at least 20 years ahead.