Table Of ContentEuropean Family
Business Barometer
Incorporating UK results
Sixth edition | 2017
www.kpmg.com/uk/familybusiness
www.europeanfamilybusinesses.eu
2 European Family Business Barometer
Welcome to the sixth edition of
the European Family Business
Contents Barometer, a collaboration between
European Family Businesses (EFB)
and KPMG Enterprise.
Introduction 04
Confidence remains steady 06 Our annual survey this year received more than 1,100
responses from family business owners across Europe,
Addressing key challenges 10 uncovering their continued confidence for the future of
their businesses and family ties to the business. Despite
Driving business performance 14 ongoing challenges, it appears that these businesses are
moving forward confidently and planning to reinvest their
profits into their businesses and seeking new opportunities
Preparing next generation leadership 18
that will enable them to foster sustainable growth.
The road ahead 20 Within the UK we find ourselves in a unique political
and economic situation. In this report we share how
Bright path forward 26 family businesses are thinking about their prospects for
the future, and compare views from the UK to those
Methodology 28 from the rest of Europe. Despite this uncertainty, UK
family businesses have shown their resiliency and
About EFB 30 resourcefulness with 84% confident about their economic
perspective in next 12 months.
About KPMG Enterprise 31
Ken McCracken
Head of Family Business Consulting,
KPMG Enterprise in the UK
© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network
of independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
Sixth edition | 2017 3
© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
4 European Family Business Barometer
Introduction
In this sixth European Business Barometer, European
Family Businesses (EFB) and KPMG Enterprise once again
seek to bring insight on the confdence levels of family
businesses, the challenges affecting their operations and
the solutions and unifed approach that they take to ensure
sustainable growth.
Family businesses help drive the European Our annual barometer survey results
economy. 1With more than 14 million since 2013 have shown that confdence
family businesses providing over 60 continues to be gaining momentum. As
million private sector jobs in Europe, their Europe moves away from the 2008 debt
importance to the economy cannot be crisis and shows continued recovery,
overestimated. 2In some countries, they the optimism of these business owners
represent anywhere from 55 to 90 percent remains steady. In this report, we see that
of all businesses. With such an important 71% of family businesses showed overall
role in the health of the European confdence in their economic outlook for
economy, these businesses are using the year ahead.
their collective strength to make sure their
Looking back over the past year, it has
voices are heard. They stand united in
been a good period for many businesses,
their opinion that governments can — and
with the majority reporting positive
should — do more and work together to
results. Increased turnover was reported
help family businesses succeed.
by 57% of respondents, with only 13%
experiencing a decline.
© 2017 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and
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frms affliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Sixth edition | 2017 5
After several years of improving attract strong candidates with the
economic results, family business right skills.
owners are looking toward the future
Whilst some anxiety has eased,
and seeking new and unified ways
Brexit negotiations have started. The
to build on their success. Family
politics of reducing open trade remain
businesses are capitalizing on the
a concern for family businesses.
momentum of their success by Jonathan Lavender
The majority of family businesses
reinvesting their profits and growing Global Chairman
are calling on their governments to
their workforce.
KPMG Enterprise, Global Head
work together to increase integration
KPMG Enterprise Family Business,
Looking forward to the long-term in Europe with tighter political ties.
KPMG International,
success of their Having benefited
Partner, KPMG in Israel
businesses’ from closer ties
succession, today’s between European
family businesses Union (EU)
The competition for
are working as a countries, these
skilled labour continues
more collective business owners
to increase as economies
unit and preparing would have greater
for passing the improve and the average confidence in
business on to the seeing a strong,
unemployment rate in
Olaf Leurs
next generation. unified EU.
Europe hovers at 9% Chairman
The positive outlook KPMG Enterprise
KPMG Enterprise EMA
comes with its and European
Network and Tax Partner,
share of significant challenges. Family Businesses (EFB) explore
Meijburg & Co,
Profitability and competition are major these issues and more in this edition
KPMG in the Netherlands
concerns for these businesses. By of the European Family Business
far, the greatest challenge continues Barometer. We hope you find this
to be the ‘war for talent’. report insightful and helpful for
planning a strong future for your
The competition for skilled
family business.
labour continues to increase as
economies improve and the average Should you have any questions feel
unemployment rate in Europe hovers free to contact us or a local adviser.
Jesus Casado
at 9%. Although family businesses in For more on the report methodology
EFB Secretary General
Europe enjoy a favourable retention please see the methodology section
European Family Businesses (EFB)
rate, the competition is fierce to at the end of the report.
© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
6 European Family Business Barometer
According to the survey results, increased competition
combined with a decline in profitability continue to present
Confidence a challenging environment. However, family businesses are
responding by planning for the future and developing new
products and services as well as innovative sales techniques
that will serve them well for the long term.
remains steady The ‘war for talent’ is likely the greatest challenge that will
require family businesses to stand out in order to attract the
talent they need. The scarcity of the skilled labour pool may
inspire a move to put pressure on governments to improve
The European family business community flexible labour market regulations.
enjoyed a year that included positive economic
growth and relative political stability, which
likely contributed to their continued level of
confidence and sense of optimism.
© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Sixth edition | 2017
7
Q1 How do you feel about your family business’ economic
perspective for the next 12 months?
Very
confident 18%
23%
Neutral
25%
14%
Confident
53%
60%
Negative
2%
2%
0.5% Very negative
0%
Note: No answer given (European): 2%
Note: No answer given (UK): 0%
Source: European Family Business Barometer, Sixth Edition, KPMG International, 2017.
Key: UK results
© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
8 European Family Business Barometer
Confidence rooted in success Reinvesting in the business
The European family business community Without the pressure of having to justify
continues to hold steady in their high level quarter-over-quarter results, family
of confidence for the future. In the survey, businesses tend to keep a long-term
71% of respondents reported feeling outlook in sight. Most reported plans to
confident or very confident with their use the profits realised over the last year
economic outlook for the next 12 months. to reinvest in their businesses.
About one-quarter remain neutral about
Business infrastructure, manufacturing
their prospects and only 2% felt negative
and marketing were listed as spending
or very negative about the coming year.
priorities for 47% of respondents, led by
This level of confidence has shown the UK and the Netherlands. Reinvesting
considerable and steady improvement over in people through hiring and training
the last five years. These results are likely were cited by 28% of businesses, led
rooted in recent strong results – over the by Germany and Netherlands. Another
past year, more than 57% of respondents 23% reported plans to pay off loans and
reported an increased turnover whilst 27% increase their savings accounts, whilst
maintained turnover. Only 13% indicated a only 7% plan to distribute all profits to
reduced turnover. The Netherlands (73%), their shareholders.
Austria (71%) and the UK (70%) saw the
Their confidence for the future is
most significant increase in turnover.
also reflected in plans to grow their
The overall European economy has workforce. Whilst 39% are planning
certainly contributed to higher levels to maintain their current staff levels,
of turnover. Increased demand and 44.7% plan to bring in additional people
favourable competitive landscapes were to increase staffing levels over the
cited by 39% of respondents as factors coming year. This is further evidence that
for success. However, innovation and family businesses are one of the major
investment on the part of family business job creating drivers in Europe.
have also made a difference. Respondents
credited introducing new products and
services (23%), strong sales techniques
(16%), intelligent marketing (10.5%),
effective internal processes (14%) and
new pricing policy (7.5%) as contributing to
their growth.
© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved.
Sixth edition | 2017 9
Family businesses have shown
resilience over the last 5 years,
evidenced by sustained positive
results and optimistic plans for
the future, which will serve them well
in overcoming key challenges such as
attracting and retaining talented people,
political instability and declining profitability.
Jonathan Lavender
Global Chairman, KPMG Enterprise, KPMG International
© 2017 KPMG LLP, a UK limited liability partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
10 European Family Business Barometer
Addressing
key challenges
Many family The ‘war for talent’, increased competition and a decline in
businesses are proftability are all top of mind for family business owners.
having diffculty
Businesses are faced with making diffcult choices and must
attracting skilled
look for new ways to stand out as competition heats up.
labour and management
level employees in the UK.
Focussing on attracting a
more diverse talent pool, Are you having diffculty in attracting staff to your family
coupled with providing and business, and if so, at what levels?
communicating a compelling
employee proposition are Yes, unskilled Yes, skilled Yes, management No
labour labour level
two ways in which family
businesses are differentiating 12% 44% 33% 35%
themselves in the market and
overcoming this challenge. UK data only
Ingrid Waterfeld
Director
KPMG in the UK
© 2017 KPMG LLP, a UK limited liability partnership and a
member frm of the KPMG network of independent member
frms affliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved.
