Near-term expectations for Connecticut's family businesses are relatively optimistic, according to a new survey published today. More than half of the businesses surveyed (52%) expect increased revenues in 2013, and 65% expect revenue growth in 2014.
Released by the Connecticut Business & Industry Association, the 2013 Survey of Family Businesses is part of the Family Business Program, launched in 2012 to support and grow the state's thousands of family businesses. The program is sponsored by CohnReznick, First Niagara, and Reid & Riege LLC.
CBIA's annual Survey of Family Businesses illustrates the issues and concerns facing the state's thousands of family businesses. This year, taxes and regulations (cited by 41% of respondents) are the biggest external challenges for Connecticut's family enterprises.
When asked about their company's proudest achievement in the last year, 67% identified recent growth/expansion, maintaining or achieving profitability, success in new business models or certifications, lean initiatives, facility renovations, staff development, or corporate citizenship. Significantly, however, 27% identified no major achievement or reported that they were simply proud to have survived the past year.
"Responses paint as clear a picture of the strengths and priorities of Connecticut's family businesses as they do of the weak economic climate in which they operate," said CBIA Vice President and Economist Pete Gioia, noting that a large percentage of respondents said Connecticut is not a business-friendly state.
Other key findings:
Most respondents (61%) are second- or third-generation companies. Of those, roughly half are manufacturers. First-generation companies, on the other hand, belong primarily to the service sector (30%), followed by manufacturing (20%), construction (18%), and retail (14%).
Only 9% of respondents foresee a decrease in revenues in 2014, compared to 20% who project a shortfall this year. Annual gross sales/revenues for responding companies averaged $38.3 million, with a median of $5 million.
About half of the businesses surveyed (47%) expect their workforce to remain stable, and 34% plan to add jobs.
Workforce development is the greatest internal challenge facing family businesses. Specific human resources challenges over the next five years for Connecticut family businesses surveyed are-in order of prevalence-skill deficits, leadership development, implementation of Obamacare, workforce shortages, compliance with labor laws and mandates, and creating a business culture aligned with growth plans.
Top concerns regarding business growth are a slow economy (cited by 25% of respondents as the number-one concern) and overall business costs (23%).
While 40% identify Connecticut's customer base as their greatest source of growth this year, half of the family businesses surveyed trace most of their market growth in 2013 to other states. Ten percent see the strongest growth in international sales.
Family businesses plan to make significant investments, greater than a typical year, in equipment (63% of respondents), IT (41%), facilities (35%), employee recruitment and retention (35%), and training (25%).
Surveys were emailed in August 2013 to top executives at approximately 1,500 family-owned companies throughout the state; 209 questionnaires were completed, for a response rate of 14% and a margin of error of +/- 6.9%. Read the full report.