In the UK family businesses employ around 9.5 million people – that’s more than all the FTSE 100 companies combined.
Family businesses also account for 31% of GDP and 15% of UK’s total tax revenue (source: the UK Family Business Sector report 2008).
So, family businesses are an important part of the economy – not only here in the UK but also around the world.
Advantages of Family Businesses
1. Because family businesses are not subject to the same pressures from shareholders to pay dividends and deliver quarterly results that listed companies have to endure, they are able to take the long-term view. This means that family businesses can re-invest that money in the business when the going gets tough instead of paying out dividends to share-holders.
2. Most family businesses have a relatively simple hierarchy and management structure. This means they can deal with problems quickly and react more rapidly to changing market conditions.
3. A family business is more likely to work harder to maintain its reputation and build good relations with its customers simply as a matter of pride, as the family name is often above the door.
4. Family run businesses are less likely to make their employees redundant, and are less likely to make deep cuts in times of recession. This can lead to having more loyal staff than in other types of companies.
All these aspects make working either in your own family business or for a family business a good choice.
When a Family Business Goes Wrong
The disadvantage of a family business is when disagreements occur, it can go beyond the business and turn personal. When it goes really bad you have a family breakdown, turning siblings or cousins against each other or, parents against their children or, vice versa.
Therefore, it’s important that family member’s try to keep personal and business apart by having agreed procedures and clear succession planning in place.
Business Training is a Family Business
I’m the third generation to run our distance-learning college. Originally my grandfather set it up in 1932 as The National School of Salesmanship to provide sales courses. Then my father added Business Training (1974) and The Writers Bureau (1989) to the group. I hope to continue providing high quality training, to our students around the world, for many years to come. And after me – who knows – maybe one of my children or nephews will want to continue in our footsteps.
If you’d like to find out more about Family Run Businesses here are some useful links:
