There is no tradition of heritage – What did the first research on family companies’ status in Serbia show?

Family companies make one of the world economy key elements. Some 70% of companies are family-owned and they make more than 50% of GDP and 60% of employment rate. However, 70% of these family companies do not survive the transfer from the first to the second generation and 95% do not survive until the third generation take them over. It is the consequence of the preparation of the next generation to overcome demands of the extended business, to recognize all their companies` strength sand eliminate weaknesses to the most possible extent.

Serbia does not have a genuine tradition of family business heritage and their owners and managers face overall economy environment challenges without real incentives or more serious business support – it is the mutual conclusion of the participants of the first research on the status of family companies in Serbia, conducted by Chapter 4 PR and ProEduca, sponsored by Vip mobile and supported by the Serbian Chamber of Commerce.

As it has been said at today’s conference where the results have been presented, in the period January20- February 28, 2014, more than 1500 family companies were contacted in order to generate 190 questionnaires but due to irregularities, 20 of them did not participate in the final analysis. A total of 170 successful domestic family companies such as Artival,Greenet, Sunce Marinkovi, Infostud, Tehnoplast,Trikotaza Ivkovi, Sirogojnocompany, Tehnobiro, Perihard, Galeb, Novitas, DrvoArt, Enelps, Refot B,Pharmanova, Tehnikom, etc. among others, underwent the survey.

-The first research data in Serbia showed that some 60% of firms have been operating for less than 20 years. Some 84, 5% were set up by current owners,11,9% were inherited and 3, 6% acquired. The data also show that 67,9%companies are owned by the first owner, 29,2% were managed by the second generation and only 2,4% were inherited and managed by the third generation which directly points out at the huge challenge of generation transition ahead of us - Tamara Bekcic, the General Manager at PR agency, Chapter 4, said.

At the conference

Owners of family businesses have great trust when it comes to their family members and in 44, 6% cases they consult them for important decisions. Some 23,2% make decisions independently and some 32, 1% consult other experts who belong to a category of the so-called non-family managers. Even 25% of owners do not have a practice of hiring non-family managers.

- It is an interesting fact that basically there is an open attitude when it comes to external managers but owners do not show it in practice. Managers at high positions, who are not a part of family, can be found in 41, 7% of surveyed companies –Bekcic says.

A large number of family companies suffer world economy crises consequences,81% of them. This caused a significant profit decrease in most of them - 9%. However,during the previous years, the same percentage of companies succeeded in increasing profit as well.

Company owners point out that the biggest business challenges are quality staff recruitment, high commitments to the state, everyday administrative difficulties, loan issues, and strong foreign and domestic competition.

During the previous six months, 48, 8% of companies revised or updated their strategic plans while every fourth company did it last year. It is an interesting fact that every tenth company (11, 3%) does not have a strategic business plan. In the upcoming period,company owners will set sales and production development, human resources,education, marketing and export as their business priorities.

- Vip recognizes the importance of the entrepreneurial development in Serbia and wants to support family company owners to gain essential knowledge and skills for successful management and market approach. Modern technologies, where telecommunications is the first ranked, help managers develop family business because they enable business operations in line with the most modern standards and open new options at the local market as well as better approach to foreign markets - Vojislav Lali, Marketing Manager for business users in the Vip mobile company, said.

Vip business forum scheduled for April 9

Although all successful companies look alike, every unsuccessful one is unsuccessful in a unique manner. The project objective is to point out at specific problems family-owned companies encounter, which makes a majority of the entire economy structure, to stress out key challenges which companies’ future and existence depend on as well as to make suggestions and options for overcoming them and options for increasing chances for long-term sustainability and success available to their owners.

These are only some indicators confirming the need for serious approach and family companies’ business activities development in our country. Therefore, as the next step within the project, Chapter 4, Pro Educa and Vip mobile as general sponsor are organizing the first Vip business forum in Serbia called Family companies – a pillar of Serbian economy development. The forum is scheduled for April 9.

- The publication, Family companies – a pillar of Serbian economy development, is underway as well as numerous workshops and experts’ lectures on family companies in Novi Sad, Nis,Kragujevac, Cacak and Krusevac – Tamara Bekcic says for eKapija and adds that the research showed that Serbia is below the world average and that it will be conducted again in a year or two when it becomes clear whether experience exchange and specific advice brought some benefits.

I.M.