Many family business owners are concerned their scale-up journeys are at the end of line, with 33 per cent reporting younger family members are not as interested in pursuing the business as they were in former generations.
This is according to research by Direct Line for Business, which reported that 29 per cent of those operating a family business fear their company will die when they retire. In fact, 21 per cent of these business operators think it is unlikely any family businesses will exist in the future.
The construction industry has the highest volume of businesses (25 per cent) with the family roots in the name (“and sons”, etc). Wholesale and retail trade came in second with 15 per cent, and agriculture, forestry, fishing and manufacturing joint third at eight per cent.
Jane Guaschi, business manager at Direct Line for Business, said: “Family businesses offer unique opportunities for the next generations, as they are often able to gain valuable experience at a young age. Future proofing can, however be difficult, so a succession plan is essential.”
Across the UK, 28 per cent of those who own SMEs employ family members, with 14 per cent doing so on a full-time basis, and 12 per cent doing so on a part time basis. A further one in 12 plans to hire a family member in the future, when they reach a suitable age or level of experience.
According to the Institute for Family Business, family run companies contribute £460bn to the UK’s GDP, and contribute £133bn to the UK government in tax revenues.
Research from Domo found that family businesses make up 35 per cent of the Fortune 500. Founders of Concast, Hess, Aflac, Leows (Hotels and Resorts), Family Dollar, Cablevision and McGrawHill all past the role of CEO on to their sons.
Although working for a family business is more common than people may expect, fewer than one in three companies survive through a second generation of leadership, and only one in ten make it through a third generation of leadership.