The saying goes ‘you don’t choose your family’, but it seems some Brits do – as their business partners. Barclays Business asked the nation if it were ever to set up shop, would they pick a family member and revealed one in three (32%) would do so, rising to two in five (40%) 18-34 year olds.
Barclays found three in five UK adults (61%) would want to pass on a family business to the younger generation in their family if they had the opportunity, however 23% of those over 55 feared that the younger generation would not want to inherit it.
The research is part of the latest report on family business from Barclays and CEBR. The ‘Second Generation Family SMEs in the UK’ report reveals fewer businesses are being passed down to grandchildren. The number of businesses handed on to the next generation has fallen by 136,000 since 2007. Currently, 570,000 family-run UK SMEs have been in the family for more than one generation. Seven in ten (71%) of these have been in the family for two generations, while 29% have made it through to the third generation and beyond.
Rebecca McNeil, Director of Business Lending and Enterprise at Barclays Business commented: “Family-owned SME businesses are at the heart of the UK economy and a valuable heritage. Owning and running a business with your family can be as aspirational for many Brits as owning your own house. We’ve seen some customers bank with us for over 100 years and others who have carried their business down through seven generations or more!”
When it comes to the relative most people want as a business partner, siblings are top of the poll, with 27% saying a brother or sister is their top pick if they went into business with a family member. This is closely followed by fathers with 9% of the vote, while mothers (7%) and cousins (5%) were third and fourth choice. It’s also a case of blood-thicker-than-water – trust is the reason 64% Brits who would consider setting up with family would turn to their kin as business partner (10.4 million1).
Those surveyed cited being their own boss (34%), input into the direction of the business (17%) and greater responsibility (8%) amongst their top reasons for mixing family with business. And practical elements also play a significant role, like better balance for childcare commitments (9%) and the ability to work from home or stop commuting (12%).
Rebecca McNeil added: “The old childhood game of playing ‘shop’ with siblings is actually a reality for brothers and sisters who want to work in the family business together. While working with a relative may not be for everyone, it can also be a recipe for success. We know that by 2018 these businesses will contribute over £120billion to the UK economy so it’s important that they are supported and continue to remain in the family.
“We have seen a big increase in lending to family businesses over the last 12 months, and we expect these family SMEs to draw down up to £3billion over the next three years. We continue to support and fund viable businesses that have real potential to grow and we are proud to have led the industry on business lending for the UK.”