Survey: Some 70 Percent of Family Firms Have No Plan for Handing over Business

Bratislava, 27 September (TASR) - Almost 70 percent of family businesses in Slovakia don't have a plan for handing over their businesses or don't know whom to give them to, with half of these companies operating for more than 20 years, according to a survey on family businesses in Slovakia prepared for consulting firm Subin & Partners. "Family businesses are extremely important for this republic, or for any economy in general. Although it isn't a well-known fact, they are the largest employers, representing about 60-70 percent of employment. They create the biggest share of GDP," explained Michal Subin of the consulting firm. According to him, family businesses are a pillar of countries and their economies, including from the viewpoint of geography and building communities across their territory. The survey further showed that most family businesses don't have a plan and don't know how to proceed. However, this isn't only a problem for the Slovak economy, but for the whole of Europe, including Western countries that didn't undergo regime change, stated Subin. Based on the respondents' answers, experts found out that 62 percent of these companies are run exclusively by a family, without the presence of external management. According to experts, this might negatively affect the future and survival of family businesses. For example, if children aren't interested in joining a family business, there's a risk of bankruptcy or the sale of such a company, warned Subin. On the other hand, he stated that the dynamics are changing and that people are becoming increasingly open to allowing external managers to enter their family businesses. The survey also found that some 24 percent of the respondents are concerned that their children won't want to continue the business. At the same time, 22 percent of entrepreneurs surveyed are concerned that their company might have to be sold. ko/df