HSBC: Entrepreneurs Hope to Keep Business in Family
Across ten markets surveyed, most entrepreneurs hope to pass their business to a family member, according to an HSBC report. However, preparations lag intentions.
Globally, 78 percent of entrepreneurs would like to keep their business in the family, according to an HSBC report entitled «Family-owned businesses in Asia: Harmony through succession planning». Asian markets led in this regard with India at the top spot (88 percent) followed by mainland China (83 percent).
However, the region also had the most respondents who had no business succession plan in place with Taiwan (65 percent) and Hong Kong (64 percent) being the most unprepared. In contrast, the three most prepared markets – US (37 percent), UK (40 percent) and United Arab Emirates (48 percent) – were all outside of Asia.
Sale as Exit Plan
Nonetheless, there were still some who planned on selling their business as the exit route. This was most preferred by respondents in Hong Kong (29 percent), Taiwan (27 percent), and mainland China (25 percent). The sector most favored for sale globally is electronics (21 percent), which Asia dominates with an export share of two-thirds.
«There is importance attached to legacy, but not necessarily to keeping the business in the family. HSBC’s report found that, despite wanting and trusting the next generation to carry on the family business, many Asian entrepreneurs recognize their children may have different aspirations and a significant proportion are open to them exploring these,» commented Lok Yim, regional head, global private banking, Asia Pacific, HSBC.
The report was based on research conducted by Ipsos UK on behalf of HSBC with 1,798 high net worth business owners holding at least $2 million of investable assets. The research was conducted online in mainland China, France, Hong Kong, India, Singapore, Switzerland, Taiwan, UAE, UK and US.
