The contribution made by family-owned firms to the UK economy has grown by ten per cent in the last five years, according to research from the Institute for Family Business (IFB). It revealed that such companies generate 1.3tn in turnover, are responsible for more than one-quarter of UK GDP and employ almost 12m people.
But that doesn’t mean family business owners haven’t had their fair share of sleepless nights. According to CBAM, management succession planning was deemed to be a night terror for 39 per cent of business owners, while 35 per cent cited engaging and developing the next generation as a concern.
Ownership succession and developing responsible future owners was also stated as a worry by 34 per cent of respondents. The same number, CBAM claimed, highlighted identifying and maintaining family values as an ongoing concern.
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Penny Lovell, head of private client services at CBAM, said: Succession planning is naturally a significant concern for family businesses and requires careful consideration. Not only must owners consider developing their replacement, and ensure family values are adhered to, they also must plan for their own retirement. Taking advice early and developing a personal financial plan is crucial to alleviating anxiety and meeting long-term goals.
However, the day to day running of the business came in as the top worry for family business owners, with 40 per cent suggesting continuing to develop and remain a profitable business was a key concern. Outside of family businesses immediate control, four in ten business owners said red tape, regulation and legislation was a worry.
Lovell further added that UK SMEs now face a multitude of challenges and family-owned small businesses can have an especially hard time navigating regulation and adapting to changing policy while remaining loyal to their unique set of family values. “Beyond that,” he said, “all this must be done while running a profitable business.
Top worries for family businesses:
(1) Continuing to develop and remain a profitable business
(2) Management succession planning
(3) Red tape, regulation and legislation
(4) Planning for later life
(5) Engaging and developing the next generation
(6) Ownership succession and developing responsible future owners
(7) Identifying and maintaining family values
(8) Extracting value from the business
(10) Developing effective marketing, social media and PR strategies
Meanwhile, it’s been constantly highlighted how vital family businesses are to the UK, but Mash Direct cautions that working alongside your loved ones can be challenging, and there are certain rules everyone should agree to follow.