Magazine: What will the future bring for family businesses?

Family enterprises play an important economic role in both Europe and Hungary. In Hungary about 70 percent of companies are family-owned, and these firms produce more than half of the GDP and employ half of the active population. Ákos Ékes, head of business development at K&H told that the bank pays special attention to family businesses, which constitute half of their corporate customers. The bank’s strategy is to support the operation of these enterprises in the long run and to help them preserve family values.

According to K&H’s family business study, 52 percent of these enterprises calculate with stagnation for the next 12 months, 39 percent forecast growth for themselves and only 9 percent think their business performance will worsen. 27 percent of family enterprises wish to invest more in development in the next year. 16 percent of them plan to recruit more workers, but the majority of them only wish to increase the size of their workforce by maximum 5 percent. Family businesses is about to face great challenges at both micro and macro level.

Some of these challenges are more characteristic of family businesses, e.g. half of these companies don’t have a scenario for handing over the business to the next generation, despite the fact that the takeover of the new generation will be due in the next 5 years at half of the companies. Because of the lack of a generation change scenario, 2/3 of family enterprises cease to exist during the process. According to Tom Kürti, member of the presidency of the Association for Responsible Family Businesses in Hungary, family enterprises have come to a decisive period: they need to pass on all their experiences and assets to the next generation.