MANAMA: Three quarters (76pc) of family firms globally made use of government support programmes to overcome the Covid-19 crisis, finds a new report.

Analysing family business responses to the pandemic, a study by the Successful Transgenerational Entrepreneurship Practices (STEP) Project Global Consortium and KPMG Private Enterprise found that the support was primarily in the form of low-cost loan arrangements, and that there was less interest in government subsidies among family firms compared to non-family businesses.

The report, titled Mastering a comeback: How family businesses are triumphing over Covid-19, includes insights from nearly 2,500 family businesses and more than 500 non-family businesses.

Sixty-nine per cent of family businesses reported that Covid-19 resulted in an initial revenue decline, 9pc reported an increase specifically due to actions taken to pivot their business, and 22pc reported no revenue changes.

The survey also found that there was an 8.56pc workforce reduction among family businesses globally, compared to a 10.24pc reduction in non-family businesses.

More than 70pc of respondents said they maintained their R&D investments and continued to launch new products and services, during the pandemic.

A key takeaway is that the involvement of the family and their long-term mindset has enabled family businesses to demonstrate resilience in the pandemic, and their unique structure makes them well-positioned to lead the revival of the global economy.

Three core strategies used by family businesses to address the immediate impact of Covid-19 were: 1. Exercising patience, 2. Being socially responsible and 3. Transforming the business.

Commenting on the findings, KPMG in Bahrain partner for KPMG enterprise Harish Gopinath said: “After the initial action and strategy to cushion the business from the financial impact from Covid-19, families need to shift their attention to their longer-term strategies for sustaining the purpose and non-economic value that the family derives from owning and managing the business.

“Family businesses in the kingdom are already closely integrated within the community through the products and services they provide, the jobs created, and their philanthropic initiatives.”

Mr Gopinath believes it is critical for family businesses to focus on other objectives, such as governance and transgenerational succession.

“This crisis is a test of time, and we truly believe that the more mature and professionally run family businesses will not just survive the impact but thrive beyond it,” he added.

avinash@gdn.com.bh

© Copyright 2020 www.gdnonline.com

Copyright 2021 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (Syndigate.info).

Disclaimer: The content of this article is syndicated or provided to this website from an external third party provider. We are not responsible for, and do not control, such external websites, entities, applications or media publishers. The body of the text is provided on an “as is” and “as available” basis and has not been edited in any way. Neither we nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this article. Read our full disclaimer policy here.