10 things you need to know about family business
3rd April 2018
Today we see the launch of the latest IFB Research Foundation report, detailing the incredible contribution family businesses make to the UK.
We’ve pulled out the ten key findings you need to know. If you’d like more detail, you can read the full report, which was compiled by Oxford Economics, here.
- There are more of them than you might think
There are now 4.8 million family businesses in the UK – that’s 88% of all businesses. That figure often surprises people – but it shows just how important family firms are for the economic success of communities across the country. From sibling start-ups to multigenerational international brands, family businesses are the backbone of the UK economy.
- They aren’t only small businesses
While the majority of family businesses are the kind of small local businesses you will find in every town or high street, they aren’t all small businesses. There are now almost 17,000 family firms that are mid-sized and large. Family business make up 47.2 per cent of all UK mid-sized businesses, and 10% of all large businesses
- Millions of people work in family firms ….
There are now more than 12 million people working in family businesses. To put that in perspective, that means family firms account for 46.5% of all UK private sector employment
- …. And that number has increased in recent years
Since 2010 there are now an extra 2.3 million people working in family businesses. That’s a 23.8% increase – outstripping the 10.6% increase in non-family firms.
- They generate a quarter of UK GDP
The report also reveals that family businesses’ gross value added contribution to UK GDP has increased by £100 billion since 2010 – to £519 billion – meaning family firms now generate a quarter of UK GDP.
- They help fund important public services
The amount paid in taxes by family businesses is more than the annual NHS budget. Family firms contributed £149 billion in taxes to the Exchequer in 2016 (the most recent year for which figures are available).
- They’re everywhere
With the Government’s Industrial Strategy there has been much discussion about supporting economic growth throughout the whole of the UK. This report reinforces that family firms what an important role family firms have to play in that, with over two-thirds of family businesses found outside London and the South East. Wales has the highest concentration of family firms of any part of the UK.
- There are a million new family businesses
Not only is the contribution of family businesses not something that should be underestimated, but the number has also been growing. Since 2010 there are a million more family businesses in the UK. We’re pleased to see so many siblings, parents, cousins and spouses recognising the benefits of being part of a family business.
- They’re still growing ….
Family firms now turn over a phenomenal £1.4 trillion annually – and that number is up by 7.2% since 2010. Not only have family businesses continued to grow, but their turnover has grown by more than that of non-family businesses since 2010.
- …. And have plans to grow even more!
But family business owners aren’t resting on their laurels. Looking ahead 63% of smaller family businesses aim to grow their sales over the next three years. And 60% plan to invest in improving the skills of their workforce to achieve that growth.
We will be sharing more from the report, including some of the challenges facing family SMEs, over coming weeks – so please do check back for the latest insights.