80% of Spanish Family Businesses Confident of Growth
January 16th, 2014
KPMG prepared the study of Spanish companies in collaboration with local associations linked to the Family Business Institute (Instituto de Empresa Familiar), which encompasses around a thousand companies, with a turnover representing, in aggregate, 27% of the GDP. KPMG also conducted parallel studies in other European countries, with which the Spanish case is compared.
The economic crisis has caused a revenue decline in 44% of the Spanish family businesses and 31% of European family businesses. 25% of the Spanish family firms claim to have created jobs during the past six months, while 37% were forced to reduce their workforce. In Europe, 40% of family businesses report having hired new staff and only 24% had to reduce their workforce in the last six months.
Given this scenario, 74% of the Spanish companies increased their presence abroad, compared with 59% of those belonging to the other EU countries.
With regard to investment, the Spanish and European companies agree that they are continuing to focus on their core business (36% and 48% respectively), while 29% of the Spanish companies and 26% of the European are aiming to internationalise.
Meanwhile, 24% of Spanish family businesses and 17% of Europe’s will attempt to diversify their activities. When considering future investment opportunities, 63% of the Europeans and 53% of the Spanish are looking beyond their home market.
The main destinations for Spanish family businesses are Latin America (22%), Europe (10%) and Asia (7%), while for the average European family business, Asia is the most attractive market, with 16% of the total, after the other European countries, which are preferred by 20%.
El Economista reported that, despite the drop in revenue, one in four Spanish companies have experienced an increase in sales, however still a figure lower than the rest of Europe (46%).
In the analysis of the main problems identified by these businesses, the complications are centred on the fall in turnover due to the decrease in volume and profitability, for 58% and 51% of those questioned, respectively.
Limited access to credit in order to make investments (21%) and for their daily activities (18%) also concerned the Spanish family businesses more than it did the Europeans, which in their case reduced to 17% and 11% respectively.
Furthermore, 61% of Spanish family businesses have had problems with access to finance in the past six months, compared with 51% in Europe. The main consequences are the problems arising in the management of cash for 20% of Spanish and 19% of Europeans, and the difficulties in promoting new investments or in internationalisation (12% and 10% respectively).
As for the reasons that they consider are behind the problems of access to finance, the Spanish companies point to the increase in necessary guarantees (32%) and interest rates (30%). When obtaining financing, the most attractive option for the Spanish company is bank credit (39%), followed by equity (38%), and with regard to the policy changes they would consider most beneficial, the Spanish family company indicates a reduction in taxes and lower social security contributions (75% and 67%), followed by a simplification of labour agreements (58%).