Most Indian Family Businesses Are Micro Or Small Enterprises; Strong Presence In Service Sector: Report
The report indicated a rising trend of female involvement in family businesses, especially in managerial roles. While 40 per cent had women as owners, a majority, 54.7 per cent had female members actively managing the business
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Most Indian family businesses are micro or small enterprises, with a strong presence in the service sector, according to a report by the SP Jain Institute of Management and Research (SPJIMR).
The report titled 'India: State of Family Business Report 2023' stated that family businesses in India predominantly consist of micro and small enterprises, significantly contributing to the nation’s business landscape.
Notably, a significant 83 per cent of manufacturing businesses fall into the micro or small category, compared to 73 per cent in the service sector.
While talking about how family ownership is predominant, the report stated that 51 per cent of respondents report 100 per cent of family shareholding, demonstrating a commitment to control retention. Emphasising the closely held nature of Indian family businesses, 63.3 per cent hold over 75 per cent of the shares.
Tulsi Jayakumar, Executive Director, Centre for Family Business and Entrepreneurship, SPJIMR, added, “This report delves deep into the heart of Indian family businesses, exploring their intricacies, values, and ambitions. It showcases their commitment to maintaining control and fostering growth while facing various challenges.”
The report indicated a rising trend of female involvement in family businesses, especially in managerial roles. While 40 per cent had women as owners, a majority, 54.7 per cent had female members actively managing the business.
The report also underlined the complexity of succession in family businesses. While many intend to pass the baton to the next generation, uncertainties, including capability, interest and conflicts, often delay the transition.
Beyond these challenges, the report highlighted the digitalisation journey of family businesses. While approximately 25 per cent of family businesses prioritise digital and new technologies, the majority are embracing online sales for diverse reasons.
Notably, SMEs exhibit intriguing preferences regarding digitalisation timing and methods, including their choice of ecommerce platforms, marketing strategies, and future online sales initiatives.
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