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PwC study : Entrepreneurs estimate growing business and exports in the next five years

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Most family business owners in Romania estimate a constant increase of business and a doubling of exports in the next 5 years and would like government support under the form of fiscal facilities, state guarantees and loans , according to PwC.Entrepreneurs want higher investments in improving infrastructure and the quality of the education system, to better prepare future graduates for realities in the labour market, conclusions of the PwC study Family Business Survey Romania show.

 

The study shows that in a difficult market, family business in Romania had good results last year, 71% of respondents obtaining a business increase. Moreover, owners and managers are confident about increase prospects in the next 5 years, 61% expecting a constant increase, while 13% want a more aggressive advance.

 

When we speak about challenges faced by family businesses, most owners and managers mention foreign factors, such as market conditions (52%) or increased competition (32%).At the same time 42% of respondents are preoccupied by the fiscal regime and 29% by government policies.

 

In a more optimistic tone preoccupations concerning the availability of financial resources which were pressing at the beginning of world crisis dropped, only 13% of respondents mentioning it at present.

It seems there is a growing confidence in the BNR capacity to manage the volatility of the exchange rate, 16% of those interviewed mentioning this problem.

 

Being confronted with a low export share in overall business figures, Romanian family companies seem less worried by European economic crisis, just 13% of respondents indicating this factor as a threat.

As for challenges within companies, respondents are preoccupied by personnel retention (39%), most owners and managers of family businesses considering they are disadvantaged compared to multinational companies in the competition for the best trained employees especially because of salary differences and developing career prospects.

On the other hand 32% of respondents plan to focus on reorganizing companies in the following years while 26% are worried about the production capacity and the ability to cope with clients’ orders. Cost control seems to have been reduced, only 19% of respondents mentioning it, while 10% concentrate on fiscal planning.

 

AT the same time while exports generate about a third of Romania’s annual GDP, private companies do not seem to be too connected to the foreign market, only 15% of the business figure being generated by exports compared to the world average of 25%.

 

Romanian entrepreneurs are confident in improving these results, while estimates on exports show an up to 27% increase of business figure in the next 5 years. So, family businesses in Romania will register the highest export growing rate in the world (77%), before Greece (70%), Turkey (64%) and Italy (67%).

 

As for the destination of exports, it is not diversified 70% of Romanian respondents indicating Europe. The second most important export destination for Romanian entrepreneurs is the Middle East and Gulf countries (10%), while Africa and Asia-Pacific share the third place as destination for 7% of respondents.

 

Firm owners and managers would like the government to take measures and reduce the fiscal burden by applying exemptions for tax on profit in case of reinvested profit.They would also like the simplification, predictability and stability of legislation and the reduction of bureaucracy. Another request for the government would be government support for these new markets through state guarantees and support to develop business, networking and marketing.

 

Representatives of family businesses also want state loans or fiscal credits to purchase new technologies allowing them to increase productivity and cope with competition.

Moreover local entrepreneurs feel the Romanian education system is inadequate in the labour market and are dissatisfied with the low quality of the new graduates’ training, 58% of family business owners and managers saying they did not have the right abilities to bring VAT to employees.

 

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