Family businesses in Canada and worldwide are harnessing their unique strengths to rebound from the pandemic and spur recovery, suggests a new report.
Mastering a comeback: How family businesses are triumphing over Covid-19 by KPMG Enterprise and the STEP (Successful Transgenerational Entrepreneurship Practices) Project Global Consortium analyzed survey data from nearly 2,500 family businesses and more than 500 non-family businesses, including Canadian family enterprises.
The study found that a long-term mindset, as well as careful cash-flow management and help from family members at large, helped make family-owned businesses more resilient and responsive to the pandemic’s initial shock.
Family businesses used three core strategies to respond to the impact of the pandemic on their businesses and family legacies: business transformation, social responsibility and patience.
Business transformation was the number one priority for Canadian firms, highlighting a strong focus on long-term strategic planning, a release said.
“Family business owners tend to look beyond short-term profits and measure success by the ability to sustain and protect the longevity of the business and succession plans for the next generation,” said Yannick Archambault, partner and national family office lead with KPMG Enterprise, in the release.
Globally, family businesses were 42% more likely to deploy a business transformation strategy than non-family firms. And 17% of Canadian family firms experienced revenue increases during the pandemic, frequently by pivoting the business.
Social responsibility tended to reflect a commitment to employee and society welfare and upholding firm reputation, while patience allowed business owners to understand the full impact of the pandemic on the businesses and to observe actions taken by their competitors. As a result, family businesses may have a competitive advantage to seize opportunities, the report said.
As they do so, they’ll also fuel the country’s recovery. Family businesses account for about 7 million jobs in Canada, 90% of the employment generated by small and medium-sized companies, and nearly 50% of private-sector gross domestic product, according to a 2019 report from the Family Enterprise XChange Foundation.