(Expansion) – It is common to find that, regardless of size, in all crises there is a greater degree of optimism among family businesses (EF). In the context of the current pandemic, the dust raised by uncertainty is beginning to subside and the question is emerging among family businesses around the world, how to regain growth?
The results of specialized surveys reveal that, like the ravages of the pandemic, this optimism is viewed in the long term and with caution by family businesses. For example, in the Credit Suisse Family 1000: Post the Pandemic report , 40% of family businesses on different continents were confident that they would regain their financial stability in the next 12 months.
By placing the magnifying glass on Mexican EFs, our 2021 Family Business Survey showed that more than half (55%) of those surveyed expect growth in 2021. Meanwhile, the 2020 statistical report Level of progress of Family Business to achieve its continuity and harmony , carried out by CIFEM – BBVA, revealed that 82% of those surveyed affirmed that they were confident that the family business will succeed in 2021.
To a lesser or greater extent, family businesses show enthusiasm that is not gratuitous; behind it there is a system of family values, a sense of commitment and pride, knowledge transfer and a disposition to personal sacrifice that no other type of company has.
All these factors play in favor of the growth of family businesses in Mexico, and consequently of the national economy, when they are used in key areas.
Diversity of opportunities
There are many ways in which growth opportunities can present themselves for family businesses in Mexico. One of them is diversification. But before taking that step, it is essential to support any decision with a market study that allows obtaining a complete image of the new market in which you want to enter. This will help to identify if you have the capabilities that the new market demands and if there is a real need that represents a business opportunity.
Another challenge that family businesses that decide to diversify must face is to overcome egos to seek advice outside the organization and expand information on new markets and, at the same time, acquire new skills and knowledge necessary to competitively meet demand.
After market research, some RUs may find that they are not yet ready to diversify. This can be beneficial as it avoids taking unnecessary risks and can shed light on unfamiliar market channels for the products or services that are part of the core of the business.
Formalization, an urgent step
EFs have been burdened with pending tasks such as the documentation and development of succession plans, the successful transition between generations, and the early involvement of the younger generations.
Every family business should have a short-term business continuity plan and a long-term succession plan. The pandemic came as a reminder that circumstances can change quickly, without families having control over them.
It is often said that a succession plan that is not on paper and ink does not exist. The responsibility for designing, formalizing and ensuring the execution of a succession plan rests entirely with the leaders of the RUs. As complicated as the task may sound, any succession plan project must include and collaborate with the entire family, including interested third parties.
Although it is obvious that succession plans must be developed for the new generations who will take the reins of the company, it is important that they contemplate their timely and comprehensive training, always keeping generational changes and their implications for business continuity on the radar. . Younger generations may not be interested in managing the business they will inherit, but knowledge of the operation is necessary to ensure the continuity of the business in the hands of the family. The communication of the succession plan would be the last responsibility within this project for the leaders of the family organizations.
By applying the entrepreneurial and innovative spirit, as well as the generational resilience that characterize family businesses, to these pending tasks, it will be possible to enhance the long-term success of businesses that help build a strengthened and sustainable economy.
Editor’s Note: Juan Carlos Simón is the Lead Partner of Family Business Services at PwC Mexico. Follow him on. The opinions published in this column belong exclusively to the author.
