Family firms make up 60% of the nation's businesses and, compared
to non-family businesses, have more productive employees, survive
longer and provide more opportunity for women, according to
research published today (June 19) by Barclays.
Their recent survey, A Family Affair - Today's Family Businesses,
examines the 1.6 million family firms in England and Wales with
a turnover of less than £5 million. It looks at their experiences,
the challenges they face and how they differ from non-family
Strife in family businesses is a staple of TV
drama and indeed nearly two-thirds of family business owners
agree that running a business can create tension in the family.
But far fewer - only half - feel that the family itself presents
a barrier to resolving any business issue or problems that may
arise and only 4% have experienced business conflict serious
enough to result in a member of the management leaving the firm.
Nearly half of all family owner-managers do not believe that
staff who are also family have difficulties gaining the respect
of other employees within the business. However, a quarter believe
that this can be a problem. One in ten family business owners
feel at a disadvantage with customers and believe it would be
easier to gain their respect if they worked for a non-family
Other key findings are:
Family businesses have a greater sales turnover per employee,
despite being smaller;
On average family firms have been trading for seven years
longer than their counterparts - on average 22 years;
Nearly three in ten family businesses are run by women,
while only 25% of non-family businesses have women at the helm;
The highest proportions of family businesses are in the
North West (72%) and East Anglia (78%), the lowest London (44%);
Family firms are most common in the agricultural (94%)
and retail (73%) sectors and least common in financial services
(40%) and business services (38%).
Mike Rogers, managing director of small business at Barclays,
says: "When we think of family businesses, the first names that
spring to mind may be the Ewings of Dallas or the Beales and
Evanses of EastEnders. The truth of the matter is that three
out of every five businesses today are family run - and while
they may well have their dramas, they survive and thrive from
one generation to the next."
20% of family business owners say they prefer to employ their
nearest and dearest, citing greater trust reliability and loyalty
as the reasons. More surprisingly, 45% of family businesses
would rather employ strangers citing reasons such as not wanting
to mix family and business (28%), finding their kin harder to
manage (28%) and believing they cause more problems (26%).
Owners of family businesses find it particularly hard to separate
their work and home lives. Three quarters take work home with
them and over two-thirds find it difficult to switch off at
evening and weekends. In contrast, 64% of owners of non-family
businesses take work home and 59% find it hard not to think
about work when at home.
Surprisingly, 60% of family business owners have not thought
about succession planning or what will happen to their business
when they retire. With nearly two-thirds of respondents aged
45 or older, this may be something they will need to consider
sooner rather than later. When asked what help the Government
could most usefully provide for family businesses, almost one
in four said tax relief on succession.
Mike Rogers continues: "Some issues are specific to family firms
and legislators, educators and the business community need to
get a better understanding of them. Only once we understand
the motivations and desires of family business owners will we
be able to help them continue to prosper and grow well in to
the future - bringing benefits to the economy as a whole."
1. Source of research - research undertaken by Critical
Research Ltd on behalf of Barclays. 750 interviews were
conducted between 18 and 27 February 2002, among a randomly
selected cross-section of businesses with annual sales turnover
of up to £5 million. Quotas were applied by region and industry
2. Copies of this research are available through the Barclays
Small Business website at www.smallbusiness.barclays.co.uk
3. Over 30 case studies are available, spanning a wide range
of business sectors including retail, agriculture, transport,
technology, manufacturing and engineering.