Romanian family businesses prioritise expansion abroad, a study by EY says. According to the 2017 edition of the ‘Barometer of family businesses in Romania’ in the next three years, family businesses will invest in their staff, in expanding new markets and digital transformation.
Of the 247 businesses surveyed, 73 percent of family businesses with turnover of over EUR 1 million do not have family governance structures. Less than half of those surveyed say they would put their business first, should there be a conflict between family and business needs. All respondents surveyed said they had identified the person or people responsible for carrying further the family business.
According to Alexandru Lupea, EY Romania Partener and Strategic Growth Markets Leader, Romanian faily businesses are increasingly interested in following the digital trends. „If at the 2015 edition of the barometer one could not talk very much about trends in the digital enviroment, at the current edition, 66 percent of family businesses with a turnover of over EUR 1 million have one employee whose role is to follow these trends,” Lupea said. Moreover, 6 percent of companies are planning to recruit for this position, while only 28 percent do not yet have a Chief Information Officer or an equivalent, he added.
If faced with a situation where the needs of the business and those of the family would exceed the financial resources available, 57 percent of respondents said they would adjust both the needs of the family and of their business, spreading them between the two.
According to the study, only 27 percent of respondents aim to set up governance structures that can step in and take over when disagreements or conflicts occurr between family and business. Moreover, 85 percent of family businesses with over EUR 1 million turnover hold regular meetings to discuss issues connected to the business, and most of them (80 percent) meet more than three times a year for this purpose.
A total of 20 percent of Romanian family businesses with a turnover of over EUR 1 million made with success the transition to the second generation of entrepreneurs, while 73 percent of them are still headed by founders and are preparing for succession. Globally, 50 percent of family businesses manage to make the succession at the second generation and only 20 percent manage to make the succession at the third generation.