Family businesses in India are on a growth trajectory, with 89 per cent of them expecting to grow in the next two years, according to a survey.
The global survey, ‘Family Business Survey 2019’ by PwC, was done among 2,953 family leaders across 53 countries, including 106 family business leaders, between April 20 and August 10, 2018.
The survey has revealed that 89 per cent of family businesses in India expect to grow in the next two years, with 44 per cent of them looking at growing aggressively and 45 per cent expecting steady growth.
“Regulatory changes are getting family businesses to bring in order and professionalise the business, and disruptive technology is pushing them to transform. These new market dynamics are cultivating a renewed sense of ambition in family businesses, making them resilient in the face of change,” PwC India Partner and Leader, Entrepreneurial and Private Business, Ganesh Raju K said.
In terms of expansion, a little more than half of the family businesses are open to internationalisation, while 40 per cent are looking at diversification, the survey said.
Nearly half of the family businesses in India are open to mergers and acquisitions both within India and outside thus reinforcing the belief that inorganic growth will facilitate synergies and achieve incremental revenue, it said.
A lot of Indian family business owners are looking at private equity or venture capital funding or are looking at listing their business on stock exchanges.
Further, the survey said, more and more companies looking at professionalising their business functions are distinguishing between ownership and management as they feel partnering with the right talent might help family businesses to adapt to the changes.
About 73 per cent of Indian family businesses have the next generation working in the business and 60 per cent plan to pass on the management or ownership to the next generation.
It also found that 92 per cent of family businesses in India allow family members to work in the business. When it comes to spouses or partners, three-fourth of family businesses allow them to own shares and two-third allow them to work in the business.
BUT – there is some evidence the next generation of young Indians will want to branch out and create their own startups rather than the traditional path of joining the family firm.