Approximately three quarters of Malta’s businesses are family owned businesses. Despite that, only 30% of these businesses succeed to the next generation.
The discussion held during this year’s SME Week between the Family Business Office and several stakeholders, was a perfect platform to imprint the importance of family businesses, and how such entities had to rapidly transform their business models to combat the challenges posed by COVID-19.
“We can look at 2020 as the year of setbacks, or we can define it as a test to adapt, innovate and diversify our strategies,” stated Dr Joseph Gerada, Regulator at the Family Business Office. Dr Gerada emphasised that family businesses can avail themselves of a network of support incentives proposed by key stakeholders such as banks. “Currently, there are 188 registered family businesses in Malta, and our aim is to support these businesses and encourage other SMEs to register as well.”
“Family owned businesses tend to be the most resilient and adaptive entities as they operate for the long term” highlighted Albert Frendo, Chief Credit Officer at Bank of Valletta. When asked about the bankability of such businesses, Mr Frendo replied that this ultimately depends on the nature of the business, their financial management, efforts to rejuvenate themselves, and the governance and vision they propose for the future. “Not only are these businesses bankable, if they are inherently sound but we are there to help them take the necessary tough decisions to ensure their ability to grow and prosper,” concluded Frendo.
The BOV Family Business Success helps certified family businesses take the strategic leap to transfer ownership to next generations or shareholding between members. It is a product of innovative financing solutions to assist SMEs in facing adversity and regenerate themselves in difficult times.
A family business is not necessarily yours, but it can be grown and re-invested for the next generation. Talk to them by sending an email to firstname.lastname@example.org.
Information about registering under the Family Business Act and other initiatives for family businesses can be found here.
This content was supplied by Bank of Valletta