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Four learnings from the European Family Business Barometer 2016

Family business challenges

15 December 2016

KPMG and EFB (European Family Businesses) have once again conducted a study into the turnover, financing and obstacles of family businesses in Europe this year. The results of the European Family Business Barometer 2016 reveal that more than 500 of the European family businesses surveyed realised higher turnover than ‘other’ businesses. What’s more, most of the family businesses do not have any difficulty obtaining financing. The major concern family businesses face is the availability of skilled staff. The main insights gleaned from this European study are outlined below.

Looking to the future with confidence

Despite recent upheavals in the European market, the war for talent and business competition, the boards of European family businesses still foresee a bright future ahead. More than 72% of those surveyed said they were optimistic about the coming twelve months. This confidence is founded on the mature phase many of these businesses have reached and the advantages they experience as family businesses on the financing market. This is reflected in the fact that the vast majority (83%) of these family businesses expects to see growth in turnover in the coming year.

Investing in new plans

The top priority of family businesses is consequently to raise profitability and revenue, closely followed by investing in innovation. This is because the ability to innovate has become a precondition for competing in today’s market. In light of the positive outlook for the year ahead, many of these businesses are preparing to make multiple investments. They are convinced that only reinvesting profit will ultimately lead to higher returns.

War for talent is biggest issue

Besides external influences, such as political uncertainty, hiring professional staff appears to be the biggest concern for family businesses. Family businesses are known for their unparalleled ability to retain talented staff. They often also have lower staff turnover than other businesses. The fact that these businesses rely so heavily on their staff does lead to vulnerability due to the increasing scarcity of good staff.


Business succession to the next generation is a key theme within family businesses. Many owners see a changing of the guard as a way to make the business future-proof. They do this either by giving young family members management roles or by bringing in external expertise and talent. The Barometer reveals that selling a family business often does not feature as highly on the agenda.

Also read: ‘Family businesses can showcase their qualities more effectively’ on a study conducted by the Baker Tilly Berk Chair in Family Businesses and Business Succession. NPM Capital is affiliated with this Chair as a sponsor.