We’ve all seen family run businesses go under, from boarded up high streets to online enterprises. In these tough economic times, it’s often family run businesses that suffer.
Only 30% of family firms make it to the second generation. However, with an estimated 3 million of the country’s 4.6million SMEs being family run, they will play a key role in brightening UK economic fortunes.
The Next Generation
UK figures show that family firms contribute 31% of our GDP. With figures of 49% from Germany, boosting this figure could only help uncertain economic prospects.
Currently, there are approximately 1 000 UK companies employing more than 250 people. Most family businesses are sold before reaching this level due to a lack of experience within the managing family to take their business to the next level.
Consultancy Steuer Gregsson has urged family businesses to plan their management successions from the outset. This will mean passing on to the next generation doesn’t mean the end of a business. Many company owners admit to not thinking this through adequately, but it is important and can ensure a business can continue to grow beyond the first generation.
Government support is available for those family run businesses looking to expand their prospects overseas. UK Export Finance is introducing a number of schemes to help businesses who can’t obtain finance through normal paths.
In Northern Ireland, where 75% of business are family run, the Queen’s University Management School is carrying out research to help create more opportunities for family run businesses.
In England, the Management School at the University of York is planning to work extensively with family run businesses. A series of workshops will begin in April, looking at everything from strategy to survival for family run firms.
Select Factoring is always supportive of family run SMEs. If your family business is struggling financially, factoring and invoice discounting could provide you with the flexibility to pass on your hard work to the next generation.