Almost 68 per cent of family businesses in the Middle East are worried about the impact of government regulations on their businesses, a new survey has found.
The annual PwC survey, which polled 44 family firms in the region and 2,400 companies globally, noted that this proportion was significantly higher than the 46 per cent of firms that voiced similar concerns last year.
Although PwC did not point out a specific reason for the increase.
In addition, family businesses in the region still face the traditional challenges of succession and professionalising the business.
“Only 14 per cent of Middle Eastern family firms have a succession plan that has been discussed and documented, which is even lower than the global average of 16 per cent,” the report said.
“The ‘passing of the baton’ has always been a potentially perilous one for the family firm, and a number of factors are now coming together to make the succession process more hazardous than it has ever been before.”
Despite these concerns, Middle Eastern family businesses continued to be ambitious with 40 per cent looking to achieve aggressive growth over the next five years. About 98 per cent were confident of achieving this growth figure, PwC said.
Family firms in the region were also more successful than their global counterparts, the survey noted.
Around 79 per cent of firms in the Middle East recorded growth in sales over the last year, significantly higher than 65 per cent of family firms polled globally.
“Family businesses in the Middle East, much like their global counterparts, need to adapt faster, innovate sooner and become more professional in the way they run their operations if they are to remain successful,” said Amin Nasser, PwC Middle East Entrepreneurial & Private Clients leader.
“In particular, they must address challenges related to innovation, succession plans and governance with the same commitment and energy they allocate to sales and growth plans and running their businesses on a day to day basis. All these factors will contribute to professionalising the business and the family alike.”