Sales of Singaporean family businesses plunged by 33%

The slowing economy is not the main culprit.

Market conditions are taking a toll on family businesses in Singapore with sales growth down a third (from 72% in 2014 to 47% in 2016), according to a new report by PwC. At the same time, family businesses in Singapore saw sales reduction go up from 21% in 2014 to 33% in 2016.

Family businesses in Asia Pacific are the most ambitious, with 21% (15% globally) looking for the quickest and most aggressive growth according to findings from PwC's biennial global survey of family businesses: The ‘Missing Middle': Bridging the strategy gap in family firms. In Singapore, family businesses are less optimistic about quick and aggressive growth (15%) with the majority of respondents (62%) predicting steady growth and 5% reflecting that the business will shrink over the next five years.

The report warns that family businesses' growth outlook could be further curtailed by the organisation's own lack of strategic planning rather than economic factors or other external concerns.

In fact, many issues now facing family business come back to a lack of strategic planning – the ‘missing middle' – namely having a strategic plan that links where the business is at now to the long-term. This results in many families not being able to turn early promise into sustainable success.

While some family firms are managing strategic planning well, many are caught between the deluge of every day issues and the weight of inter-generational expectations.

PwC found that areas such as digital and innovation, conflict management and succession are not being tackled effectively.

Although digital technologies play an increasingly important role in business, less than half (47%) of family businesses in Singapore have a strategy fit for the digital age and only one in 10 respondents (12%) indicated that being more innovative was very important.