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19 June 2002

From Kitchen Table to Boardroom Table - Family Firms are the Backbone of British Business.


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 businesses.

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 business.

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%); and,
• 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."

Notes

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 sector.

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.



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last modified: 19-June-2002