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For Immediate Release
CONNECTICUT'S FAMILY-OWNED BUSINESSES FACE UNIQUE CHALLENGES, State government should do more to help
Connecticut 's family businesses, like most companies, are very concerned about rising health care and labor costs and a lack of skilled workers. But their biggest challenge is the overall cost of doing business, with an emphasis on high labor costs and the state's regulatory burden. They also face unique problems including business succession, future viability, strategic planning, employee training and management challenges. Family business owners believe state government could do more to attract and keep family-run businesses in the state. Those are among the key findings of the Connecticut Business & Industry Association (CBIA)/ University of Connecticut (UConn) Family Business Program Survey, released today. This survey, the first to deal specifically with family-owned businesses in Connecticut, explores key issues facing family-business owners today and examines concerns they have about the future. The survey is part of a partnership between CBIA and UConn's School of Business Family Business Program, designed to help family-owned companies through all facets of business planning, development and operation. "Connecticut 's family businesses face most of the same issues confronting the largest companies operating in the state, yet they also have unique challenges, said John R. Rathgeber, CBIA president and CEO. The cost of doing business and rising health care costs remain their most significant concerns, but family businesses also deal with succession planning and the kinds of struggles typically found in family structures. The ability to manage both business success and family interests is a hallmark of family-run businesses in Connecticut. The majority (82 percent) of respondents said the most critical issue facing Connecticut 's family businesses is the high cost of health care benefits. Other important issues include the personal income tax (43 percent), estate tax reform (40 percent), the corporate income tax (35 percent) and payroll taxes (34 percent). And three-quarters of family-owned business respondents said the prohibitively high cost of doing business in the state is their most significant impediment. "Family owned businesses help make Connecticut unique, said Jay M. Sattler, tax partner at Blum Shapiro. But their problems are not, with two of their top three concerns involving taxes. Lawmakers need to be mindful of the impact tax legislation has on businesses that provide so many jobs in the state. Family-business owners believe that state government can do more to help make Connecticut a more attractive place for families considering opening new businesses here. According to the respondents, the most helpful actions that lawmakers could take would be reducing the cost of doing business (70 percent), reducing taxes and offering tax credits (60 percent), encouraging business investment (37 percent), reforming property taxes (35 percent) and improving the regulatory climate (29 percent). Family-run companies face a unique set of challenges that are less relevant or immaterial to other business entities. The top issues cited by 24 percent of respondents were those relating to succession and the perceived competence of family members working in the business. But despite the importance placed on business succession and management transition planning, fewer than half (39 percent) of respondents said their company has a business succession and future sustainability plan, and only 36 percent intend to develop one within the next two years. Other challenges cited that are distinctive to family businesses were compensation issues (20 percent), lack of communication within the family (20 percent), and lack of family/nonfamily management communication (13 percent). "Connecticut 's family businesses remain resilient in the face of numerous challenges and impediments, said Richard N. Dino, Ph.D., UConn School of Business. But they are addressing issues of concern to their organizations and planning for the future. In an increasingly complex global economy, they are demonstrating the will and ability to survive and remain competitive for generations to come. Connecticut's family businesses know that technology will help them compete today and in the future, and nearly all (95 percent) of survey respondents said they are utilizing modern advances in technology, including those for the Internet, production materials, project planning software and internal customer communication software. "Family-owned businesses have been a pillar of the Connecticut economy for more than two centuries, said Richard M. Barry, president, Citizens Bank Connecticut. We hope this important survey will encourage state lawmakers and regulators to adopt policies, particularly in health care, that will create an environment that allows our family-owned businesses to compete and succeed. The survey was sent by e-mail to approximately 4,200 Connecticut businesses, as well as members of the UConn Family Business Program. There were 641 returned surveys, for a response rate of 15 percent and a margin of error of plus or minus 3.9 percent. CBIA is the state's largest business organization, with 10,000 members. ### Editor's Note: For a complete copy of the survey, visit cbia.com/newsroom/surveys. For more information contact Nancy Andrews, CBIA media relations manager, at 860-244-1957 or andrewsn@cbia.com. 350 Church
Street · Hartford, CT 06103-1126 · cbia.com/newsroom
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