Only 58% of family businesses in Romania say they want to ensure the business stays in the family for the long term, compared to 74% in Central and Eastern Europe (CEE) and 66% globally, according to the PwC Global Family Business Survey 2023. Moreover, only 63% of family businesses in Romania have plans for the future of the business, such as shareholder agreements (39%), dividend policies (39%), emergency and contingency procedures (15%) or wills (12%). By comparison, 69% of family businesses in CEE and 81% globally have such arrangements.
The key long-term personal goals of Romanian family business owners are to protect the business as the most important family asset (87%) and to generate dividends for family members (84%).
„In Romania, the family business ecosystem is still young, with 90% of these companies still in their first generation and only 9% in their second generation, compared to other countries in Central and Eastern Europe or globally where there are companies that have reached their third or fourth generation. Succession planning is a way to lay a solid foundation for the future, to identify new ways to develop and grow the business. For example, involving family members from the next generation, who have digital or sustainability knowledge, could lead to the business transformation necessary to survive in the future,” said Dinu Bumbăcea, Country Managing Partner PwC Romania.
At the same time, the level of trust between family members is generally considered high, with 74% of respondents saying there is family alignment on the direction of the company (compared to 59% overall).
„A smooth succession, planned to the smallest detail, is a guarantee that the future of the family and the company is and will be stable. The process does not just focus simply on passing the ownership to the next generation or securing wealth by establishing a proper legal structure, but covers the establishment of communication rules, setting up proper family governance and passing the knowledge, experience, and values on to the younger generation. On the other hand, the decision to sell the business can be taken when the business needs to move to another level of development and the owners are unable to finance the necessary investments or need a strategic partner for this purpose,” said George Ureche, Director PwC Romania.
Other findings of the report
Most family businesses in Romania (82%) increased their sales in the last financial year, up from 55% in 2021, a year still affected by the pandemic, similar to the level in the CEE (83%) and above the 71% recorded globally.
At the same time, growth targets are also ambitious for the next two years: 27% of family businesses in Romania are expected to grow rapidly and aggressively, compared to 20% in CEE and 14% globally.
While growth and profit are considered essential, most agree that profit should not come at the expense of customers or employees.
Most family businesses in Romania set goals and targets for customer satisfaction and growth, but only a minority set them for diversity and inclusion and social impact.
The key priorities facing Romanian family businesses over the next two years are increasing customer loyalty and introducing new products and services (both much higher priorities than the CEE or the global average). The key priority groups for Romanian entrepreneurs are customers and shareholders followed by employees.
The Global Family Business Survey interviewed 2,043 family businesses in 82 countries worldwide, including Romania. The aim of the survey is to understand what family business representatives think about current issues.
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Many more interesting quotes in the video below: