Indian Family Business: Rising Female Involvement, Succession Challenges

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Indian Family Business
Image courtesy: Representative Image

Family businesses, primarily consisting of micro and small enterprises, play a significant role in India’s business landscape, according to the ‘India: State of Family Business Report 2023’ by the SP Jain Institute of Management & Research. The report reveals that 83% of manufacturing businesses and 73% of service sector businesses in India fall into the micro or small enterprise category.

One noteworthy finding is the strong generational involvement in these businesses, with 70% actively led by the first and second generations. Family ownership and control remain prominent, with 51% of enterprises reporting 100% family ownership.

A positive trend emerges in female participation, with 40% of family businesses having women as owners and 54.7% involving female members in active management roles. However, the report highlights the complexity of succession planning, where uncertainties related to capability, interest, and conflicts often delay the transition to the next generation.

Despite these challenges, the report underscores the adaptability and resilience of Indian family businesses. In FY 2022-23, a majority of them reported stable or increased sales, market share, employment numbers, profitability, and financial indicators. While 25% of family businesses prioritize digital technologies, the majority are embracing online sales for various reasons, with intriguing preferences among SMEs regarding digitalization timing and strategies.

In summary, the report reflects the vital role family businesses play in Indian economy, with increasing female participation and the ongoing challenge of succession planning. Despite these hurdles, family businesses continue to demonstrate their adaptability and resilience in an ever-evolving business landscape.

Re-reported from the article originally published in The News 18

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Indian Family Business: Rising Female Involvement, Succession Challenges

Indian Family Business
Image courtesy: Representative Image

Family businesses, primarily consisting of micro and small enterprises, play a significant role in India’s business landscape, according to the ‘India: State of Family Business Report 2023’ by the SP Jain Institute of Management & Research. The report reveals that 83% of manufacturing businesses and 73% of service sector businesses in India fall into the micro or small enterprise category.

One noteworthy finding is the strong generational involvement in these businesses, with 70% actively led by the first and second generations. Family ownership and control remain prominent, with 51% of enterprises reporting 100% family ownership.

A positive trend emerges in female participation, with 40% of family businesses having women as owners and 54.7% involving female members in active management roles. However, the report highlights the complexity of succession planning, where uncertainties related to capability, interest, and conflicts often delay the transition to the next generation.

Despite these challenges, the report underscores the adaptability and resilience of Indian family businesses. In FY 2022-23, a majority of them reported stable or increased sales, market share, employment numbers, profitability, and financial indicators. While 25% of family businesses prioritize digital technologies, the majority are embracing online sales for various reasons, with intriguing preferences among SMEs regarding digitalization timing and strategies.

In summary, the report reflects the vital role family businesses play in Indian economy, with increasing female participation and the ongoing challenge of succession planning. Despite these hurdles, family businesses continue to demonstrate their adaptability and resilience in an ever-evolving business landscape.

Re-reported from the article originally published in The News 18