Family Businesses Say Rising Costs Block Growth
While most Connecticut family-owned businesses expect to rebound from years of slow growth by adding jobs and making significant capital investments in 2013, rising costs threaten the pace and scope of that recovery.
The 2012 Survey of Connecticut Businesses, released this week by CBIA and the University of New Haven’s Center for Family Business, illustrates the challenges, concerns, and growth prospects for this important sector of the state’s economy.
The survey found almost two-thirds of respondents project sales and revenue growth next year.
Almost half said their workforces will remain stable, while 43% plan on hiring new employees in 2013. Many anticipated making significant investments in equipment, IT systems, facilities, and training.
“The last few years have been very tough for family businesses,” said CBIA economist Pete Gioia. “And while the outlook does appear brighter, there are lingering concerns, particularly with the slow pace of the state’s economic recovery.”
Survey respondents cited the high cost of doing business in Connecticut as the single greatest obstacle to growth.
For many, the cost of providing healthcare benefits and the uncertainty surrounding the implementation of federal healthcare reforms has a major impact on their businesses.
“Healthcare, labor, taxes, and the costs of regulatory compliance remain major headaches for these companies,” Gioia said. “Just keeping up with changing labor laws and mandates proves problematic.
“Family businesses are vital to Connecticut’s economy. Policymakers must make it easier for these firms to do business here, to invest and add jobs, and transition from generation to generation.”
Industries represented in the survey included manufacturing, services, retailing, construction, finance, insurance, real estate, wholesale trade, transportation, communications, and utility services.
A lack of skilled workers, particularly in computer/IT knowledge, engineering and mechanical skills, and management and leadership also were nominated as ongoing concerns.
The survey explored a number of additional areas specific to family businesses, including transition and succession issues, professional guidance and support, work-life balance, and conflict resolution.
The 2012 Survey of Connecticut Businesses is part of CBIA’s Family Business Program, an initiative designed to support and grow the state’s thousands of family businesses.
Sponsored by CohnReznick, First Niagara Bank, and Reid and Riege PC, the program features forums and networking opportunities where business leaders can discuss solutions to issues ranging from family governance to succession planning.
The survey questionnaire was emailed to top executives at 3,000 family companies in August 2012. There were 580 responses, for a response rate of 19.3%, and a +/- 4.15% margin of error.
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