The 4 Big Challenges Facing Family-Run Businesses in Canada
Family-run businesses come in all shapes in and sizes, from behemoths like Molson Coors and Bombardier with close to 100,000 employees combined, all the way to the mom and pop shop on the corner of your street. In fact, 80% of all businesses in Canada are family owned. Running a family business comes with a unique set of challenges – different than any other business. So, what do owners of family-run small businesses have to keep a closer eye on than their non-family owned counterparts?
1. The need to innovate
With 66% of Canadian family-run businesses listing the need to continually innovate to stay ahead as one of their top priorities, it is the most common challenge facing these owners. One theme that comes up time and time again is family businesses feeling “stuck” in their way of operating. 81% of businesses plan to continue to operate status quo over the next 5 years. With the world around us seemingly moving a mile a minute, it is more important than ever to get out ahead of the curve.
2. Keeping up with technology
66% of Canadian family businesses understand the importance of transitioning to digital workflows and processes, however, they are still very concerned by the age of digital disruption. Because of the general understanding and openness to this change, Canada ranks well ahead of the global average. Yet, the digital age remains one of the most common topics in management and executive meetings across the country.
3. Retaining talent
The next challenge, listed by 59% of businesses, is attracting and retaining talent. Although this is a challenge facing all types of businesses, it’s especially important for family-run ones. Because there is a typically a succession plan in place, which we will get to in a minute, some employees feel like they are on the outside looking in. This holds true not only with their careers paths, but their current level of involvement in the decision-making process.
4. Succession planning
Planning for the future is important for all businesses, but family-run businesses have something that the others don’t that needs protecting, family legacy. Only 18% of family-run businesses have a concrete succession plan in place! Compared to the rest of the world, this is quite good. Also to their benefit, 56% of these businesses have some type of plan in place, though not complete. More and more family businesses are also willing to let future leadership come from outside the family, a fact that can greatly help with recruitment.
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