By Daniel Hunter

Family businesses feel they are the un-loved sector of UK industry with a significant number feeling the Government does not recognise their importance to the UK economy.

This is the key finding for the UK from PwC’s biennial survey of nearly 2,000 family businesses in 28 countries across the world.

Despite the economic downturn, the outlook is positive for the family business sector with 47% of UK companies demonstrating sales growth. Although this figure is lower than the global percentage of 65%, 12% of UK family businesses are aiming to grow quickly and aggressively, with a further 69% aiming to grow steadily. Of these companies, 91% are confident of achieving this growth.

However, despite this positivity, globally, the majority of the respondents do not feel their government appreciates them. Family businesses in the UK have the fifth worse experience, with only Russian, French, Romanian and Greek businesses feeling less valued.

“Family businesses play a vital role in the UK economy. These are businesses that are in it for the long term, many of them have been around since the turn of the last century and seen the economy through an industrial revolution and two world wars," Sian Steele, director and head of family business at PwC said.

“However, the findings of our survey clearly demonstrate that they don’t feel as valued as other businesses in the UK and they are looking to the government to provide them with more support. This is not just through better access to finance and removing tax disadvantages, but through the provision of incentives to start-up family businesses and also providing some recognition for the role they play in the UK economy in terms of stability, job creation and entrepreneurial spirit.”

The survey also found that market conditions and competition remain the key external issues for them, but staffing is the key internal issue, with nearly half of all respondents listing recruitment as a key issue in the next 12 months. In addition, 57% of family businesses in the UK don’t believe that young people entering the job market have the right skills and education they require - only family businesses in South Africa had less confidence than those in the UK.

“Family businesses are proud of the fact they are excellent places to work with a real respect for their staff," Sian Steele, director and head of family business at PwC continued.

"This has never been more evident than throughout the recent economic downturn, with 89% of UK respondents saying they have battled hard to retain staff, even in the bad times.

“However, the fact that a developed country such as the UK can rank second to last on a metric as important as access to skilled workers is a worrying finding. This is yet another indication that more needs to be done in terms of education and schemes such as apprenticeships to ensure family businesses, and indeed all businesses in the UK, can continue to thrive.

“Having said that, there is much that family businesses can do now to help plug the skills gap through planning and strategy. Our survey results show that family businesses are looking outside of the family for input on matters such as these with 49% of the businesses surveyed in the UK having non-family members on the board and 25% having non-family staff with shares in the company.”

There is some evidence that succession issues are not as much of a concern as in previous surveys with 41% say they are passing the business on to the next generation, but there is still concern around keeping the family business in the family with 14% saying they will pass ownership of the business down, but will employ non-family management.

“Family businesses are key to the recovery of the UK economy. They contribute 25% of the UK’s GDP and employ over nine million people, yet the results of our survey clearly show they feel under supported and overlooked by the government," Sian Steele, director and head of family business at PwC concluded.

"While it is clear that there is much they can do from within to ensure they are well positioned to achieve their growth ambitions, they really are looking to the government to engage with them and listen to them to help them achieve these goals.”

Join us on
Follow @freshbusiness