A recent survey from the PwC shed light on the difficulties that often plague the passing of a family business down to the next generation. And new research from Barclays Business echoes the PwC’s findings, at least to some extent. Barclays has found that three in five UK adults (61%) would want to pass on a family business to the younger generation if they had the opportunity, but goes on to reveal that 23% of those over 55 feared that the younger generation would not want to inherit it.
Part of the latest report on family business from Barclays and the Centre for Economics and Business Research (Cebr), entitled Second Generation Family SMEs in the UK, the research also shows that fewer businesses are being passed down to grandchildren, with the number of businesses handed on to the next generation falling by 136,000 since 2007. According to the report, 570,000 family-run UK SMEs have been in the family for more than one generation, 71% of which have been in the family for two generations, while 29% have made it through to the third generation and beyond.
However, while family business handovers may be in decline, the appetite for starting up with one’s nearest and dearest remains relatively strong. A third (32%) of those surveyed by Barclays said that, if they were to ever start a business, they would do so with at least one family member, with that figure rising to 40% for 18-34 year olds and falling to 26% for those over the age of 55. And of those young people (42%) who are considering starting a business, 40% would do so with their family. After a quick bit of maths, Barclays managed to calculate that one in six (17%) young people would happily consider setting up shop with their family in the current economic and business climate.
But what is it about relatives that make them such attractive business partners? The stats were pretty categorical in this regard, with 64% of Brits citing trust as the main reason that they would turn to their family to find somebody with whom to launch an enterprise. And its siblings who top the poll for the person that budding business owners want to partner with most, with 27% of respondents singling out their brother or sister as the ideal sidekick. Siblings were followed in the pecking order by fathers (9%), mothers (7%) and cousins (5%).
The final set of stats revealed being your own boss (34%), input into the direction of the business (17%) and greater responsibility (8%) amongst their top reasons for mixing family with business. Better balance for childcare commitments (9%) and the ability to work from home or stop commuting (12%) were also cited by practically-minded respondents.
“While working with a relative may not be for everyone, it can also be a recipe for success,” said Rebecca McNeil, director of business lending and enterprise at Barclays Business. “We know that by 2018 these businesses will contribute over £120bn to the UK economy so it’s important that they are supported and continue to remain in the family.”