Leadership, long-term management succession, increased competition, financial risks, taxation and bureaucracy are some of the key issues facing Cypriot family businesses, according to the first family business study published on Tuesday.
The study was conducted Ernst and Young in collaboration with the Cyprus Chambers of Commerce and Industry (Keve) and involved 95 executives from successful Cypriot family enterprises. It was carried out between November 2016 and March 2017.
According to the results almost half of Cypriot family businesses consider brand name and customer loyalty as the most important success factor for their business, followed by careful long-term management and emphasis on quality.
Key factors influencing decision-making were the general economic environment for 63 per cent of those surveyed, followed by 59 per cent who also cited financial risks and 53 per cent who identified increased competition.
Taxation also appeared to be a major concern. Some 72 per said increased tax cuts and other incentives would boost their growth, while 45 per cent believe there should be a simpler and faster licensing process on the part of government agencies. More than one third said there was a lack of support for the promotion of local products and services abroad.
The majority, almost 60 per cent, also believe that in order to develop they need to focus on new products and the adoption of new technologies. According to the results, 88 per cent said the transfer of their business to the next generation was vital to them.
Half said they were already planning for this with timely succession, education and training for the next generation.
“Today’s family business owners are willing to employ and seek guidance from experts and managers outside the family,” the study said.
In addition, while the two sexes were equally interested in taking part in the family business, female participation has been increasing for the last few years. Family and family-run businesses have a higher percentage of women in senior positions and on the board than non-family members.
President of Keve, Phidias Pilides said that the Chamber looked forward to the promotion of legislation and the introduction of incentives to help family businesses overcome the problems they face and stay alive.
“For us, the business world, it is a priority to support family businesses, which are the overwhelming majority in our country,” he said.
He said the importance of the research lies in the fact that identifying the main problems and concerns of family businesses were at the same time revealing the necessary ways of supporting them. The main problem that family businesses seem to face in Cyprus was succession management from generation to generation.