New research from Mazars’ international alliance, Praxity, shows family businesses in the UK are booming with 79% saying profits are either higher than last year (58%) or the same (21%). As well as this encouraging historical trend, 55% also expect the UK economy to continue to improve this year and anticipate that their businesses will grow as a result.
The research also showed that the majority (over 64%) of family businesses are still run by the first generation. As people live longer, this can result in three or even four generations being involved with the business, leading to inevitable differences in views. As a result, 87% of respondents said that business disagreements put a strain on family relationships.
Lesley Fox, partner with the Poole office of Mazars who look after the tax affairs of many Dorset –based family businesses commented “Family businesses are vital to the UK economy so their financial health is extremely important. In terms of employment alone, family businesses contribute 40% of all private sector jobs in the UK and generate £1.1 trillion in annual revenues.“
Decision making is complex in this environment, with family and business criteria competing for importance. In this survey, 53% said the business took top priority in decision making, while 20% said that family criteria were dominant in making decisions. Separately, 59% said emotional aspects affect important business decisions. “The survey reveals that working in the family can create stress within the family unit. These emotional influences can result in decisions that are not easily understood by an outsider. Agreeing a family ‘constitution’ often creates a framework for a more relaxed family and more successful business” said Lesley Fox.
The majority (53%) said that they planned to give the business to future generations of their families. The current generation’s business decisions will inevitably impact the health of the legacy that is handed on.
A full copy of this report is available to download at http://www.mazars.co.uk/Home/News/Our-publications/General-publications/The-Praxity-2015-The-Family-Business-Survey