Another common theme from survey to survey is growth through diversification: more than half plan to launch new entrepreneurial ventures, but one in three family firms is still operating in only one sector and in only their home market. This can expose the family firm to risk, as the whole enterprise stands or falls on one dimension. And yet, despite their stated ambition, 72% see themselves having largely the same portfolio in five years’ time, and 53% say it is ‘not important’ to diversify at all.
Turning to international sales, and the story is very similar. Many family firms do manage to build a successful export business – in Spain, for example, this is often easier to achieve than diversification through product mix. But in general, the picture is less encouraging.
For the last few surveys, family firms have been making, on average, about a quarter of their sales overseas, while at the same time predicting that exports will rise to close to a third within the following five years. And yet from survey to survey, the actual level of international sales remains at around 25%. Likewise, in 2012, 67% said they were trading internationally, and 74% expected to be doing so in five years. But four years on, the numbers are almost exactly the same. There are many possible factors in play here, from a lack of skills and experience, to apprehension about political risk overseas, to more recent concerns about the impact of Brexit.
Overall, however, the message is clear: whether it’s growth, diversification, or internationalisation, the ambitions of family firms remain strong, but are not being fully realised. Something is holding these businesses back. In our view, that missing piece is a robust strategic plan.