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BEE big challenge for family businesses

Cape Town – Broad-Based Black Economic Empowerment (BB-BEE) is seen as a particular challenge to family businesses in South Africa, according to a survey by PwC.

The challenge is especially in relation to the availability of qualified empowerment partners and a good “fit” between the culture of family business and the culture of the empowerment partner.

“Despite a clear sense of their own importance within the economy - like job creation - family businesses in South Africa do not feel supported by the government and this impacts on the successful implementation of BB-BEE,” according to the survey.

There is a feeling that more needs to be done to support family businesses, including accessing finance and relaxing labour laws and regulation.

Family owned businesses are seen as quicker and more flexible in decision making and they have an entrepreneurial culture.

This ability to move quickly was named in the survey by some businesses as a way they could use opportunities despite the current economic challenges.

Almost 2 000 firms from across the globe, including 100 South African businesses, took part in the survey.

Family business owners tend to be self-driven, fearless, hands-on individuals, who believe in themselves, in what needs to be done and are prepared to take risks, the survey found.

Many family firms believe they are closer to their customers and have a more personal relationship with them, than multinationals. Family firms also appear more willing to invest for the long term.

Other aspects of the family business model, like internal conflict, can, however, be a hindrance to growth.

The recruitment of skilled staff and talent has become more acute for 60% of the family firms surveyed.

The rising electricity price in South Africa is seen as another contributing cost challenge.

About 26% of the respondents in the survey are apprehensive about the transfer of the family business to the next generation.

They are worried that the next generation would not have the required skills to run the company.

About 75% of the family businesses surveyed see expansion into the rest of Africa as a good opportunity for growth.

More than 80% of the businesses surveyed believe the SA government is not doing enough to help businesses survive in the current economic climate and 75% think access to finance should be made easier for family businesses.

Globalisation will be crucial for the success or failure for family businesses and their ability to innovate and explore niche opportunities, according to the survey.

- Fin24

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