A new report by the Institute for Family Business Research Foundation launched in May reveals the sizeable contribution family firms continue to make to the UK economy. The report shows how the family business sector continues to grow, shining a light particularly on how small family firms are growing and investing for the future.
Key findings
· Report shows more than 13 million people work in family firms
· There are 4.8 million family-owned businesses in the UK – 85 per cent of all private sector firms.
· Family firms generated £1.7 trillion in revenue in 2017
· Family businesses contributed £598 billion to UK GDP in 2017 – 28 per cent of the whole UK economy in that year.
· Family businesses contribute £182 billion in taxes – more than the NHS annual budget in 2017/18
· Across all regions, more family firms have increased, as opposed to decreased, their employee headcount when compared to a year ago
· More family SMEs have female leaders than non-family firms
Speaking about the new report, Institute for Family Business (IFB) Director General Elizabeth Bagger said “Family businesses are at the heart of communities across the country. And this new report shows they are a vital force in our economy too -and how their continued growth will benefit the UK as a whole. Family firms clearly have the appetite and ambition for growth. They’re investing in skills and looking to the long term. As a country we need to help more of our smaller family firms to overcome the barriers they face, and support them in scaling up and successfully transferring ownership through the generations.”
“For those first generation family businesses looking at succession for the first time, it’s important too to realise that you aren’t alone. There are successful, multi-generational family businesses all around the country who you can learn from. The family business sector offers so much potential for long term growth. Championing and supporting our mid-sized firms, and helping smaller family businesses to scale up, must be a priority as we look at what our economy will look like in the years ahead.”
For the first time the report includes information on who manages family firms and female representation in leadership roles. The report reveals that family SMEs are more likely to have female leaders than non-family firms – 81 per cent family SMEs, compared to 58 per cent in non-family SMEs, reported having at least female director, owner or partner.
The report shows that while 91 per cent of family SMEs are family managed, as businesses grow, they are more likely to employ non-family members to run the business, with around half of medium sized family firms non-family managed.
Mid-sized family firms – the UK’s Mittlestand – showed higher levels of growth with 56 per cent of mid-sized family firms growing their turnover, and 51 per cent increasing the size of their workforce over the past year.
As Ben Fowler, Managing Director of Western Pension Solutions adds, “Family businesses are vital to the UK economy and research such as this is important in helping to quantify not just the number of family firms but the impact that they have each and every day, on the economy as a whole and also the communities in which they operate.”
Download a copy of the report here
