71% of family businesses report growth, PwC finds

Some 71% of family businesses have reported growth in their latest financial year, according to the latest PwC Global Family Business Survey, with further growth expected over the next two years.

PwC’s Transform to Build report polled over 2,000 family businesses globally and revealed that 43% reported double-digit sales growth, up from 21% in 2021. Nearly 73% of those experiencing growth have a clear set of family values and an agreed purpose for their business. 

The report also revealed that about 50% of family businesses are willing to adopt sustainable business practices in line with the UN’s Sustainable Development Goals. PwC found that family businesses that do have an environmental, social and governance (ESG) strategy are trusted more by customers than those do not, although 67% of family businesses do not put much focus into developing an ESG strategy. 

Peter Englisch, global and EMEA family business leader, PwC, said: “Family businesses are showing they can grow by welcoming change and building trust with digital communication and diverse boards – even in a challenging landscape. To continue this trajectory, firms will need to re-orient to focus on delivering value not just for customers, but for society. Transformation, purpose, and legacy are no longer converse, but intertwined.”

As challenging economic conditions continue to affect family businesses globally, the report shows that only 36% are focusing on attracting and retaining talent, despite understanding that employee trust is vital for the success of the business. 

Family firms that tend to be more digitally advanced were found to be generally more trusted by the public, yet only 42% of businesses are believed to have strong digital capabilities and 52% have started to rank digital capabilities as a top five priority for the next two years. 

Digital transformation is linked with board diversity, another factor that played a role in family business growth this year, PwC said. Some 49% of businesses which adopted a digital transformation were found to also have a more diverse team. Yet one-third of all respondents only have family members on the board, a quarter have no-one from a different industry background, and only 9% are considered diverse. 

Englisch added: “While market pressures and rising costs mean survival is the main priority for family businesses globally, our latest data shows that those family businesses which are focused on digital transformation and diversity, are reaping the rewards. 

“Now more than ever, building competence and achieving strong financial performance are linked to corporate responsibility. The message is clear, for family businesses to survive, they must transform. And that transformation is now.”