EFB & Deutsche Bank report on family businesses in Europe

At the start of the year, European Family Businesses and Deutsche Bank teamed up to produce a report on family businesses to obtain and present a broad overview of family businesses’ views, assessments and expectations concerning national and EU policies and developments in the financial sector

The study showed that family businesses in Europe tend to have  very detailed ideas about what they need from decision makers and the financial system to be successful in the long run. From decision makers, their expectations focus above all on creating and maintaining the most reliable context possible in which to do business: a sound tax framework and an inheritance tax which is advantageous across Europe and not just in some countries. From the banking perspective, most respondents noted that family businesses ‘are open to banks which act as sparring partners and experts who share their know-how about exports, internationalization, and financing and business models, and which forge contacts that can open doors to new opportunities.’

Most respondents stated that it is not enough if financial partners content themselves with understanding a family business through just figures; they need to understand  the business model and the strategy as well. For example, only banks which understand these specific corporate features can gain the trust of family businesses.

Moreover, the respondents noted that the successful handover to a successor is a complex challenge. The main difficulties with the transition from one generation to the next involves early planning and an early exploration of interests within the family and within the next generation.

Another important aspect outlined by the interviewees is the question of how family businesses implement innovations. Most interviewees said that a DIY strategy is the most natural approach for family businesses, which see themselves as entrepreneurs with comprehensive knowledge about their industry.

Twenty-one representatives of family businesses were interviewed for this report, and they were chosen to provide a sample of the family business community in their countries. the respondents were chosen according to their multi-dimensional understanding and knowledge of various family business formats – from small-scale to large-scale. The study was conducted by Gesellschaft für Innovative Marktforschung (GIM).