Despite many family businesses being pessimistic about their survival at the beginning of the pandemic, they’re actually emerging from the Coronavirus crises stronger than they predicted.
RSM and Nyenrode Business University surveyed family businesses in April, delving into their thoughts on the pandemic’s impact on revenue, employee numbers and profitability.
The researchers then repeated the survey with the same group of family business directors three months later.
They found that family businesses are significantly more positive about their economic situation now than three months ago with the impact on their businesses not as dramatic as expected.
Looking at revenue, family businesses feared an average loss of 36% in April but in June 2020, the loss of revenue is only 3% compared to the previous year. The directors also expected the number of employees in the business to decrease by an average of 8.2% but in reality, they only decreased by 0.5% on average.
In April, the family businesses also expected their annual profit to decrease by 42% but, three months later, they now predict a loss of only 5%. In fact, 35% of the family businesses now expect an annual profit growth compared to 2019.
Roberto Flören, RSM Professor of Family Business and Business Transfer at Nyenrode, said, “Family businesses are characterised by flexibility, financial independence, and rapid decision-making, so they often emerge from crises better than non-family businesses. In fact, 61% of family businesses indicate that the coronavirus crisis has led to lasting innovations within the business.”
Laura Bles-Temme, Head of Tax at RSM, added, “The results show the drive of family businesses to keep their head above water in times of crisis. Emanating and giving confidence and continuing to innovate and do business, even in difficult times, are strengths of family businesses.”
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