The backbone of Britain: Why family firms are so important
There are three million family firms in Britain, which employ over nine million people.
Family firms contribute almost a quarter of total UK GDP and provide over £81bn in tax to the UK exchequer annually. But do family firms get enough support?
Family firms make a significant contribution financially to the UK economy but they are also a key source of social and human capital too, employing staff and supporting communities and giving back through their involvement in various philanthropic areas.
Family firms in the past were considered small scale – not in it for the long term.
Clearly this is not the case when you consider these statistics. Recently, alongside Family Business United, I’ve been meeting with families behind some of the UK’s most noteworthy businesses, including JCB, Drayton Manor Theme Park, Shepherd Neame, The Goring Hotel and Champneys. All are proud of the heritage that makes their family firms the businesses they are today.
Many of the three million family firms in Britain are SMEs and it is important that they get our support to help them succeed. So what can be done?
– Buy British. There is a growing movement to source locally produced goods but more could be done to encourage people to support family firms.
– More training to help family firms deal with the challenges of succession and transitions from generation to generation.
– Ensuring family run SMEs seek advice they can trust, from respected firms who understand tradition and building for the long term.
– Making more use of trusted advisers to separate family and business wealth and prepare for the independence of the older generation from the family firm.
– Provide the regulatory framework to help family firms flourish – improved tax breaks for family firms, inheritance tax provisions and reducing red tape etc.
– Assistance with implementing efficient programmes to help them recruit, retain and motivate staff (pension schemes, benefits programmes etc).
– Support for the family business community in general with great resource centres such as www.familybusinessunited.com that exist to champion the sector
– Educating the next generation as custodians of wealth and how to become responsible owners of a valued family asset. Initiatives such as our Future Leaders Programme exist to provide this sort of training.
In reality, many families control and manage significant entrepreneurial businesses within the UK, and already have plans and governance structures in place to continue to be successful for many generations to come.
While it is true that few family businesses are global organisations, many lead their sectors and continue to pioneer new frameworks to help them continue successfully. The sector deserves respect and recognition for all that it has achieved and continues to achieve day-in, day-out.
Family firms really are the backbone of the UK economy and deserve our unreserved support.
Penny Lovell is head of private client services at Close Brothers Asset Management
< Part 2 Coming Soon: How to prevent and solve disagreements within your family run firm>