Family-owned business have been at the heart of the Belgian economy for many years. They are responsible for a third of Belgium’s GDP. They have survived and thrived through a variety of financial, technological, political and social changes. According to KPMG’s European Family Business Barometer, this trend should continue, both throughout Europe and in Belgium.
Their contribution to the economy goes beyond statistics. They are drivers of innovation and growth. Family-owned businesses employ a large part of the working population. More importantly, they are part of the social fabric of the country; something that provides better interactions among members of the community.
One of the barometer’s general upbeat conclusions is that family businesses are confident about the future. They are also aware that they must become more agile, innovate faster and attract top talent to remain competitive and continue to grow.
Faith in the future
Reflecting this confidence in the future, 28% of the Belgian family businesses looked to the future very confidently, while 57% were confident. This compared favorably with the European average response of 16% and 56% respectively. In a country whose success is measured by its exports, the survey showed that 58% of family-owned business exported more than they did in 2017.
This positive outlook comes with its share of challenges. Profitability and competition are major concerns for these businesses, as is the “war for talent.” The most pressing concern, according to the barometer is political or regulatory uncertainty. In Belgium, although the new Belgian Companies Code will bring simplification, flexibility and alignment with EU regulations, there are still questions about how its implementation will affect family-owned businesses.
Another issue that worries small business owners is the Inheritance Law, which plays a significant role in the future of the business.
The fine balance between family and business is an ever‑present issue for family businesses. Making objective business decisions without considering the impact on family can create conflict and impact the family harmony. Leaning too far the other way presents the danger of making decisions that will hurt the business.
When there are family members willing to take over the business, the objective becomes ensuring a smooth transition to that next generation – for both the management and the ownership of the business. The transition must meet family concerns and ensure the new owners are well prepared. Business owners who want to build or ensure successful continuity are recognizing the importance of preparing a strong succession plan to protect the longevity of their business. Succession encompasses two distinct issues: the ownership succession as well as the succession of management leadership. Family businesses need to have strong governance in place to deal with both these aspects of transition.
Against that background, 53% of the respondents said that they would pass their management on to the next generation. 50% said they would pass their governance on to the next generation, and 53% said they would pass their ownership on to the next generation. Only 33% said they would appoint a non-family CEO.
The future remains bright for family-owned businesses, as they continue to implement strategies for growth, introduce new products and plan for an increase of employees. Their growth and legacy will likely be further secured as they invest in formal governance and make improvements to succession planning and communication between current owners and future generations.
This confidence is built on their hard‑earned achievements. With this positive outlook and commitment to strategic investments and a unified vision for the family and the business, their prospects for continued success look promising for the long run. If they can overcome challenges and stand together to push for business‑friendly reforms the future looks bright for family businesses.