Family businesses still lacking succession plans- Report
Family owned businesses in Kenya are still failing to plan for succession according to a new report by consultancy firm PwC.
According to the report dubbed the East Africa Family Business Survey published on Tuesday, the lack of continuity plans for businesses is despite the owners of the entities maintaining open communication channels.
“Within these businesses themselves, there are generally high levels of trust and communication. Yet very few of them have properly considered and documented governance and succession frameworks for their family and business,” noted Sunny Vikram an Associate Director at PwC Kenya, Entrepreneur and Private Business.
The findings largely inform the continued sight of succession battles among family members especially after the death of the primary businesses proprietors who are mostly parents.
Family businesses nevertheless remain firm having rode the wave of COVID-19 related disruptions successfully last year.
The businesses were however forced to reinvent themselves after the pandemic exacerbated decline in growth registered prior to the COVID-19 outbreak.
“Many businesses, including Kenya’s family businesses, responded to this economic pressure by cutting costs and streamlining operations,” the report stated.
Kenyan family owned business marked an average 28 per cent sales reduction in 2020 reversing a mean 52 per cent growth in sales a year earlier.
Despite pre-COVID-19 growth in Kenya being lower than the global average, Kenyan family businesses are more optimistic than the global average in terms of future growth aims next year.
Moreover, Kenyan family businesses have outlined expanding into new markets and segments, introducing new products and services and increasing the use of new technologies as their key priorities over the next two years.
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