A seminar hosted by Ganado Advocates and Zampa Debattista highlighted the unique challenges facing Maltese family businesses. Findings from a misco survey presented at the forum revealed that family businesses account for 70% of Malta’s 75,000 businesses and that while half of them have expanded internationally, another 66% intend to do so in the future. However, for those uninterested in global expansion, reasons include retirement, market focus on Malta, or lack of resources.

A first panel highlighted four core challenges facing these companies: talent shortages at all levels, technological adaptation, access to finance, and competitive pressure from international corporations.

Talent shortages were particularly concerning, as several business owners reported difficulty attracting the skills necessary for sustaining growth. The panellists argued that inadequate talent limits a company’s ability to innovate and expand, especially as industries evolve and demand new expertise. This challenge is exacerbated by older family members who sometimes resist change, favouring tradition over innovation - a mindset that can hinder progress in dynamic markets.

Adding to these hurdles, family businesses also face intense competition from global players entering Malta’s markets, putting pressure on local companies to adopt technology and streamline their operations. For these family-owned firms, evolving business practices isn’t optional; it’s critical to survival. Panellists emphasized that achieving resilience in the face of such competition requires financial flexibility and strategic foresight.

As the panel’s experts pointed out, flexibility in financial planning is crucial to safeguarding family businesses however, unlike large corporations with more diversified resources, family-owned firms remain vulnerable to economic fluctuations and inflation. Adopting flexible financial models will allow family businesses to better withstand market shifts and invest in growth.

An essential component of this growth involves training the younger generation, which many Maltese family businesses have started prioritizing. By equipping younger family members with skills in modern governance and technology, companies create a stronger succession pipeline, ensuring that new leaders can navigate future challenges and keep pace with the rapidly changing business environment.

Seminar also explored the trends shaping family businesses in Malta and beyond

One major theme in the seminar was the potential for family businesses to grow by acquisition – a move that, while complex, can deliver significant benefits. However, the panellists stressed the importance of having a clear strategy and vision in place when pursuing this route. Growth through acquisition can be an effective way to shield profits from inflation, but only if it’s approached with a well-defined plan that targets gaps in existing operations.

Speakers also noted that successful acquisitions require family businesses to identify and address operational shortcomings. By strategically selecting businesses that complement or fill these gaps, family firms can expand their market presence and bolster profitability. The experts cautioned attendees to be wary of acquisitions where “bad chemistry,” a lack of compromise, or an absence of growth potential could create difficulties in integration and limit long-term benefits.

Avoiding emotional pitfalls

A session on business valuation revealed that one of the more delicate aspects of managing a family firm involves understanding its true market worth.

Family members can sometimes assign an emotional value to the business that doesn’t align with its intrinsic value, making it challenging to determine an objective price. Valuations should be based on actual performance and potential for growth, not familial attachment.

Key elements of a successful valuation include ensuring that governance structures are in place, operational issues are managed, and necessary documentation is complete. These measures not only enhance the business’s credibility but also make it more attractive to potential buyers or investors. Increased value due to rigorous operational practices often justifies a higher price, positioning the company favourably within the market.

Technology and generational change

The seminar also explored the trends shaping family businesses in Malta and beyond, with a clear focus on the impact of technology and generational change. The younger generation of business leaders is entering these companies with a greater understanding of technology and corporate governance, and they are more willing to adopt practices that enhance agility and scalability.

Matthew Bezzina, CEO of eCabs, was featured in a one-on-one interview where he shared insights on the importance of technology in family businesses. Bezzina explained that, for eCabs, building a scalable tech platform has been essential to adapting in a fast-paced industry. Despite challenges posed by Malta’s regulatory framework, which Bezzina described as “reactive,” eCabs has managed to innovate, recently positioning its tech platform for international expansion.

His perspective resonated with many attendees, as he illustrated how technological agility can help family businesses stay competitive, particularly when expanding beyond Malta. His remarks underscored the seminar’s focus on adaptability and the importance of embracing innovation to meet global demands.

Survey findings: Internationalization and expansion goals

Survey results presented by Ilaria Zammit of misco indicated that family businesses in Malta are increasingly looking beyond domestic borders. While 47% of survey respondents reported having already internationalized, a further 66% expressed intentions to expand abroad. Those who were less inclined to consider international growth cited reasons like impending retirement, a focus on local markets, and a lack of viable opportunities.

The survey results also revealed a cautious optimism about international expansion, with many family business owners open to scaling operations when the circumstances align with their business strategy. Panellists noted that internationalization can not only increase revenue streams but also create a buffer against local market fluctuations, making it an attractive prospect for growth-minded family firms.

This article was first published in The Corporate Times.

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