In the US, 70 per cent of family businesses plan to make growth and expansion their chief business strategy over the next 12 months, and are planning to direct investment towards human resources and IT, sales and marketing, the new PricewaterhouseCoopers report on US family businesses has found.

The results on the region are an adjunct to the firm’s global survey, which found many family business owners are relatively ignorant about their exposure to inheritance and capital gains tax, even though these taxes can have a crucial bearing on issues such as succession planning. 

PwC’s survey, entitled Kin in the Game, was based on interviews with executives in more than 1,600 small and mid-sized family businesses in 35 countries.

In the US, top external challenges to family businesses included market conditions and government policy, particularly as related to taxes. 

“Mitigating the effect of the scheduled tax increases on capital gains, qualified dividends, and other income – along with the impact of potential tax increases – will require careful planning on the part of family business,” said PwC.

The top challenge to address internally for family businesses was finding skilled personnel, and more were now concerned about this than before the crisis. Overall, 79 per cent of US respondents said they planned to invest in human resources and training.

On succession planning, the proportion of US business-owners planning to hand over their business to the next generation has fallen considerably since before the crisis; it now stands at just under half, compared with 72 per cent in 2007.

Meanwhile, 81 per cent have a strategic business plan in place, but most are waiting for greater market certainty to execute it, according to PwC. And American business-owners were more concerned about market conditions than their global peers, at 88 per cent and 68 per cent respectively. This may be related to the fact many of them (over half) sell goods and services solely within the US, where consumer spending is constrained.

Just over three-quarters of US survey respondents said they had access to surplus cash, “though what they’ll do with it remains to be seen,” PwC said.

“The current picture presented by this year’s results is of businesses that have successfully weathered the economic storm (most are in a strong financial position) and are now cautiously considering where to place their next big bet,” the global professional services firm said in its report.

The survey responses did suggest, however, that family businesses are planning considerably greater investment in IT, marketing and sales than supply chain, transport and logistics. Correspondingly, the skills they are looking for in employees will tend towards the service sectors. Another factor firms are looking to address are the heightened security risks that technological innovation has brought, and people with the skill set to deal with these will be in demand.