In 2008, Firstrust Bank partnered with the Greater Philadelphia Chamber of Commerce to conduct a survey of regional and family-owned businesses. The participants of this survey were smaller, privately held companies in a variety of industries, of which 27 percent were family businesses. Thirty-six percent of the family businesses had fewer than five employees and two-thirds reported revenues under five million. Here are the results:
- The majority of family business respondents think having a strategic plan and a succession plan is very important. They regard communication as very important and put training and development at the same level. They think having a method to resolve family conflicts is very important. They also think it’s important to have clearly defined qualifications and compensation for family members who want to join the business.
- Two-thirds thought it very likely the company would remain family controlled in the future. When asked about the next leader, however, the respondents split down the middle on whether he or she would come from the controlling family.
- Roughly half the respondents were very or moderately pessimistic about the economic outlook over the next year. Sixty-four percent cited the economic recession as a major challenge facing their company.
- A third were moderately optimistic, but only one out of 78 could say they felt very optimistic about the economy.
- Forty-two percent saw modest growth and 19 percent saw significant growth in the demand for their products/services in the past year. Only 18 percent reported modest or significant reduction.
- The majority of respondents pointed to people as their source of strength.
- The top three investment priorities over the next 12 months were human resources, sales activities and marketing.
- The respondents identified healthcare costs and the economic recession as major challenges facing their companies.
- Seventy-eight percent said the new Philadelphia mayor will be good for business and 68 percent think the upcoming presidential election will have an effect on their business.
Planning for the Future
- The majority of companies use a business plan. Sixty-four percent of the responding companies have a written business plan and 59 percent reviewed it within the past year.
- Two-thirds of the companies do not have a succession plan for their senior management.
- Of the 20 percent who said their company was expected to change hands within the next five years, the majority thought sale to another company was the most likely possibility.
- Study conducted by the Greater Philadelphia Chamber of Commerce