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Family-owned businesses, long considered the heart of the Cypriot economy, are facing a crisis of survival, with most unable to pass the baton to the next generation, according to business expert Evi Sereti of PwC Cyprus.
“Small and family businesses make up 90% of all businesses in Cyprus,” Sereti said on SPOR FM 95.0’s Diaspora Edition program. “But only 40% survive beyond the next five years.”
Even more alarming, she said, is that only 30% of those businesses are successfully passed from the founder to the second generation. That number drops to just 10% by the third generation, and a mere 3% manage to reach a fourth.
“The new generation often ends up selling the business because it simply isn’t sustainable,” Sereti said, pointing to a steady decline in growth in the family business sector.
Generational gaps and digital clashes
According to Kathimerini's Dorita Yiannakou, PwC Cyprus recently held two events at its Experience Center in Nicosia to address these growing challenges, aiming to arm small and family-run businesses with the tools and strategies they need to stay competitive. The events were held under the auspices of the Cyprus-United Kingdom Business Association and the Institute of Chartered Accountants in England and Wales, with the support of the British High Commission.
Among the key findings: poor succession planning and internal family conflict are some of the biggest threats to business continuity.
“A proper succession and governance plan needs to be in place at least five years before the transition,” Sereti stressed. “And it must involve not just the second generation but also prepare for the third.”
One of the main points of tension? Expectations. Founders often place heavy burdens on their children to continue the legacy while being unwilling to relinquish control or embrace new ways of doing business.
“There is also a technology gap,” Sereti said. “Older generations are often unfamiliar or uncomfortable with digital tools, while younger family members are eager to bring innovation into the business. That clash can become a real obstacle.”
Support and solutions
While larger businesses may have internal HR departments to help with these transitions, smaller family-run enterprises usually don’t, and they’re the ones that need support the most, Sereti noted.
For them, external consultants can play a crucial role by offering guidance, training, and ongoing education. “There are solutions,” she added, “but they require planning, openness, and investment in both people and tools.”
PwC Cyprus plans to continue this effort with another event scheduled for September 9 at its Experience Center in Nicosia, focused on helping small and medium-sized enterprises increase productivity and build long-term sustainability.
