Family Businesses are the oldest and most common type of economic organisation around the world. In the UK, family businesses account for a quarter of the GDP and contributed £125 billion in taxes in 2014.
While a family business can be defined as a business where several members of the same family are involved as major owners or managers, they come in all shapes and sizes and are present in all industries. There is however a tendency in the UK for family businesses to concentrate in real estate, construction, storage and communication sectors and a tendency to rely on the domestic economy according to the report ‘The State of the Nation’ issued by Family Business United. While the majority of family business are small and medium-sized firms, the concept of ‘mum and dad shops’ has been long since over-taken with some of the biggest companies in the country being family owned.
Every two years, PwC publishes its Family Business Survey where family businesses are interviewed on their concerns, challenges, successes and thoughts for the future. The 2016 survey is the biggest to date, with 2,802 respondents. The result is a rich, unique and global insight into what’s on the minds of today’s and tomorrow’s leaders. In 2016, the survey showed that family businesses in the UK need to focus on developing a coherent strategic plan to guide the direction of innovation investment.
Family businesses are driven by values, by culture and by ‘doing things right’. When doing business with this type of organisation, it will be far from focusing on immediate returns and quick fixes. Family businesses display a very different dynamic as they are driven by the values that shaped their history and legacy. Family businesses focus on sustainable long-term success which makes them some of the most resilient groups in the face of economic downturns. Family businesses also strongly commit to their people and their markets; they usually display strong relationships built on trust across all stakeholders. Additionally, they are more entrepreneurial and have a bigger appetite for risk.
These characteristics are important to keep in mind when going into businesses with family-owned companies, as they have a tendency to look for stakeholders that display a similar approach to business, performance and relationships.