NEARLY one third of Singapore family businesses plan to sell or float their businesses, well above the global average of one fifth, a survey has found.
Only 11 per cent have a robust and documented succession plan in place.
The study, Up Close And Professional: The Family Factor, by consultancy PwC looked at 2,378 family businesses in more than 40 countries earlier this year, with 53 respondents from Singapore.
"Most family businesses here are used to the country's robust and strong culture of corporate governance, but not the idea of family governance," said Mr Ng Siew Quan, entrepreneurial and private clients leader at PwC Singapore.
"And if business owners are not confident of their succession planning, the easier option would be to liquidate and leave the market."
Mr Ng added that parents might also prefer to sell off the business to "preserve family harmony", rather than insist that their children take over.
"Mixing family and business might not work, especially when the next generation does not have the same motivations or vision in running the business as those who came before."
The study found that a quarter of family-run businesses here do not have procedures to deal with conflicts between family members. Without formal channels for communication and decision-making, the "whole enterprise (could be) at stake", said Mr Ng.
"Beyond professionalising the family business and the way it's run, business owners here need to think about professionalising the family," he said.
"This can help with succession planning and leadership development, establish rules of engagement, and set up a necessary structure for proper governance and accountability. These are crucial for family wealth planning and for continued success of the family business."
In the survey, 19 per cent of Singapore respondents said they expect to consolidate or shrink their businesses, up from 10 per cent two years ago. Only 79 per cent of them were confident of growth, compared with 90 per cent in 2012.