A new survey by KPMG has found that Irish family businesses are significantly more confident than their European counterparts about the economic outlook for their businesses for the next six months.
|Irish Family Businesses Confident About Growth Prospects
Sep 22, 2015
The results are published in KPMG’s Family Business Survey for 2015, which compares the views of Irish family businesses with their European equivalents, and shows that 89% of Irish businesses are confident about future growth prospects versus 74% of other Europeans.
In the previous six months:
- 73% of Irish family businesses increased turnover versus 57% of Europeans
- 65% of Irish family businesses increased staff numbers versus 45% of Europeans
- 73% of Irish family businesses increased or maintained activities abroad versus 67% of Europeans.
Commenting on the publication of the report, Colin O’Brien, partner, KPMG said: ‘From an Irish perspective, the results confirm the extent to which access to finance has improved here, which is a positive development. Sentiment is improving and it is encouraging to see that hiring levels are increasing in parallel. Separately, the effective devaluation of the euro relative to sterling and the US dollar is providing new opportunities for Irish family businesses exporting into the UK and US.’
- Access to finance has improved, with 65% experiencing no difficulty in the past 6 months
- 69% expect to take on more staff in the next 12 months
- 65% have hired additional staff and 31% maintained current headcount in the previous six months
- 77% believe that preparing and training the next generation is crucial for the survival and success of the family business.
- 96% agree that non-family executives bring benefits to family businesses.
More Support Needed for Entrepreneurs in Forthcoming Budget
However, certain challenges continue to create issues for entrepreneurs. Budget 2016 provides an opportunity to remedy these issues. Almost three quarters of respondents (73%) believe the current Irish tax system has a somewhat/very negative effect on intentions to pass a business down to the next generation.
Olivia Lynch, partner, KPMG said: ‘Strategies around succession planning are essential as entrepreneurship needs nurturing in the next generation and often an adequate plan for the future for all involved is not teased out or implemented. This needs to be addressed as it is crucial to prepare and train the next generation to ensure the survival and success of the business into the future. A key issue for Irish entrepreneurs is the high 33% capital gains tax they face when selling on their business. In addition, our tax reliefs on passing on a family business to the next generation are highly complex and can result in material tax liabilities without careful planning and timing.’
Other significant challenges noted in the survey include:
- Succession planning: 50% do not currently have the next generation in management positions while 73% of Irish family businesses believe that maintaining family control of the business is important/very important;
- Increased competition: 46% cite competitive factors as a major challenge;
- Recruitment: recruiting skilled staff remains a high priority with 31% seeing it as a major issue;
- Selling up: 23% are considering selling their business to a third party while a fifth (19%) are considering appointing a non-family CEO but retaining ownership and control within the family.
The 2015 Family Business Survey can be viewed here. (PDF, 952KB)
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