Family firms across the UK are setting their sights on expansion following another hugely successful year for the sector, according to the Institute for Family Business (IFB).
The body's research revealed the vast contribution family firms make to the UK economy – employing over 11.9 million people and making up 87% of all private sector firms in the UK.
Throughout the course of 2014, family businesses increased employment by an impressive six per cent, performing better than private sector firms as a whole, which grew at four per cent. Turnover also saw a strong rise, jumping by two per cent from the previous year to reach £1.3 trillion.
Furthermore, family firms paid £125 billion in taxes and contributed over a quarter (26%) of the UK’s entire GDP – a 4% rise in the sector’s gross value added compared to 2013, and a 10 per cent rise since 2010.
While the number of small and micro family businesses continue to grow, there are now over 16,500 medium and large family firms. One in 10 large businesses in the UK are also family owned, demonstrating the success and innovation within the sector. Indeed, some of the UK’s most recognisable companies are family businesses including Warburtons, Timpson, JCB, Grants Whisky and Dyson.
Peter Armitage, chairman of the IFB, said: “The report sheds light on the sheer size and scale of the family business community. It’s an important reminder of how vital family-run firms are to the UK – serving as the backbone of our economy, with family firms making a phenomenal contribution across all sectors, industries and regions.
“Family businesses have always been at the very heart of the UK economy and based on the steady rise in their recruitment and turnover, it is clear they are here to stay. It’s encouraging to see family firms with such a buoyant attitude towards their future expansion - almost half of family SMEs expect to grow over the next two to three years.”
Growth and expansion is a top priority for many SME family firms with just under half (49%) stating they aim to grow over the next twelve months.
Looking to how they will turn this ambition into reality just under a half of firms (43%) say they will invest in improving the skills of their workforce to support growth, with a third (33%) planning to boost productivity through investing in new machinery and premises.
Looking beyond their traditional activities to diversify their business and customer base, 42% of family firms are planning to move into new markets and 37% are developing and launching new products and services.