Praxity - global alliance of independent firms

27/08/2009  - Keeping it in the family as businesses build legacy for future generations:  a UK survey. 

A high proportion of the UK’s family businesses see their role as building a legacy for future generations, a survey has revealed. 

UK Family Business Survey 2008/2009

Over three quarters of them, 78%, believe the company is stronger for having family members involved in its activities. 

The major research, one of the most extensive ever undertaken, was carried out by a number of leading independent specialist business advisers and chartered accountants, in conjunction with the International Centre for Families in Business (ICFIB).   All the firms who undertook the survey are participating firms in Praxity, an alliance of independent accounting firms, and work closely with the ICFIB to improve their knowledge and understanding of the complexities of the family owned business. 

The survey also indicates that family concerns need specialist help to maximise their chances of longer term survival because only one in eight get through to the end of the third generation in the ownership of the founding family.

Second generation family businesses accounted for 34 per cent of those surveyed and nearly half of all family enterprises are first generation. 

Richard Frost, managing partner of Hawsons and Chairman of the Praxity UK working party on family businesses, said: “The survey will add significantly to the growing body of knowledge about the real issues facing the family in business and it is only by having a real understanding of those issues that advisers can better meet their needs by providing relevant support and advice.” 

The survey results also throw light on many of the satisfactions, and worries, of running family concerns: 

• 96% saw providing for current family members as one of the main purposes of the family business; 
• When considering a business decision, business always comes first (57 per cent) before family (3 per cent) whilst 40% gave equal weight; 
• The next generation of members of the family will be able to work in the business if they prove themselves capable (48 per cent),   
• Just over a half had informal and unwritten governance procedures and agreements in place to support the family business, 29 per cent  had “some documented” and 12 per cent had full family agreements; 
• Just under a half talked about business matters “whenever and wherever they were together”, 37 per cent at the workplace and 19 per cent at home; 
• 18 per cent of businesses had a turnover of £10m or over, and 43 per cent less than £1m; 
• 65 per cent of respondents had between two and three family members in the business and 21 per cent four to seven;

If the positive associations of running a family business, the most popular were: 

• Members of the family share a commitment to the business; 
• Family members work harder in a business than non-family members; 
• There is a greater willingness to reinvest profits back into the business; 
• A family shares the same values and can develop a strong culture within its business. 

The survey showed that the most negative associations were: 

• Family members can never get away from work;
• Business disagreements can put a strain on family relationships; 
• Emotional aspects can get in the way of important business decisions; 
• Transition to the next generation is more difficult than a third party sale. 

In the United Kingdom, some 75 per cent of all businesses in the private sector are family owned or run and they employ about half of the entire workforce. 

For information and advice on family businesses, please contact one of the following Praxity participating firms in the UK: 

North and West Yorkshire
Garbutt & Elliott
Craig Manson
Tel: +44 (0) 1904 464100