Notwithstanding the sagging economic situation, family businesses in India are thriving, as 74% of firms have witnessed growth in sales in the last fiscal, says a survey by consultancy firm PwC.
PwC calls the family business as a "resilient model" for the 21st century as the structure offers significant advantages and benefits, particularly with regards to their agility/flexibility, continuity and the longer-term perspective.
Moreover, family businesses also have a stronger set of values than other businesses, it says.
According to the Family Business Survey (FBS) 2012 conducted by PwC, 74% of family businesses in India have witnessed growth in sales figures in the past year, compared to the global average of 65%.
Only 8% of family businesses in India saw a reduction in sales over the last year, compared to 19% globally.
"Our survey clearly shows that Indian family businesses are less fazed by the general economic situation in comparison to family businesses abroad," PwC India Executive Director Indraneel Roy Chowdhury said.
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Going ahead, the outlook seems bright as a significant number of Indian family firms are anticipating steady and aggressive growth in the next five years, the survey said.
However, the need to continually innovate and recruiting skilled staff are two key challenges facing such businesses in India, the study highlighted.
"There is clearly an indication towards inculcating professionalism in businesses; however there are difficulties in getting upgraded skills, access to technology and necessary capital," Chowdhury added.
According to the survey, while businesses feel that they have a role to play in the growth of economy including job creation, there is also a general feeling of being burdened by increased regulations.
Meanwhile, some of the major challenges for such firms include succession planning, family conflict/politics, and the need to attract and motivate non-family staff.
Less than half the family businesses have a shareholders' agreement in place, while 22% have no procedures in place to deal with conflict, the report said.
These findings are part of the FBS global survey conducted by PwC among family business executives in India and 30 other countries worldwide.