As we all know, family businesses, like all other businesses, are facing multiple challenges. Some of the challenges they are experiencing are linked to the following:
HR and finding adequate and skilled staff.
Dealing with inflationary pressures due to the constant cost of sales increase in costs.
Curbing of overhead costs, especially with regard to salaries.
Rapid changes in business models and customer preferences, especially in a post-pandemic business environment.
However, beyond the above immediate and urgent challenges that family businesses need to deal with, there are other issues that need addressing.
One of these areas is the need for digitalisation. As family businesses are faced with the need to increase their efficiency and the difficulty in finding the right human resources, the need to digitalise various internal processes to gain the needed efficiencies while curbing overhead expenses is going to increase.
Another area which family businesses are today leaving very much on the back burner is related to climate change and the environmental impact of their business.
While today a lot of the emphasis to improve their environmental track record is focused on large multinational companies, it is clear that going forward the focus will shift on to SMEs and smaller family businesses.
Malta’s Budget 2023 outlined several initiatives and opportunities that family businesses would do well to take a note of. It was announced that Malta Enterprise will be doubling the assistance in the form of cash grants for Maltese companies that invest in digitalisation projects and projects related to sustainability.
Such cash grants will now be up to a maximum of €100,000, covering 50 per cent of the eligible investment.
It is never too early for family businesses to plan for their succession from one generation to another- Silvan Mifsud
Moreover, Maltese businesses can also benefit from tax credits up to a maximum of €40,000, when they invest in projects related to digitalisation or other sustainability related projects like the reduction of their energy consumption or the reduction of waste.
Another area which family businesses tend to unwisely keep on the back burner, often until it is too late to do something about it in an effective way, is succession planning. This is a journey and not an event. Hence, it is never too early for family businesses to plan for their succession from one generation to another or to plan their future.
Yet again, in this year’s budget, the concession for a lower stamp duty from five per cent to 1.5 per cent for ‘inter vivos’ transfers of family businesses from one generation to the next has been extended once more.
Many family businesses keep repeating the mantra that their human resource is their best asset. However, many times they fail to ensure that their ‘best asset’ is trained not only in technical skills, but also in the so-called ‘soft skills’ that are needed so much to enable family businesses to rely on human resources with the right skills, mindsets and attitudes.
Skills related to leadership, emotional intelligence, communication, teamwork, time management, conflict management and much more.
If we really believe that the way forward to grow Malta’s economy is by increasing the productivity output of each one of us, then training staff members is an absolute necessity.
Moreover, many family businesses fail to benefit from opportunities in this area. There are funding schemes, like the ‘Investing in Skills’ aid scheme offered by Jobsplus, which family businesses would do well to benefit from to gain funding for training their team members.
Family businesses would do well to plan ahead and take up all opportunities that can better position them to overcome the present challenges and prepare themselves better for the future.
Silvan Mifsud is chairperson of the Malta Chamber Family Businesses Committee.