Key UK data from the 2018 Family Business Survey
Agile, innovative and forward looking. The UK family businesses interviewed for our 9th PwC family business survey have big plans. They wish to leave a legacy beyond financial success and put the future of their businesses first.
We surveyed 130 family businesses from around the UK with a combined turnover of £25.6 billion.
Growth
UK family businesses are experiencing higher levels of growth than we saw in our 2016 survey and like their global counterparts remain ambitious. Most continue to focus on performance improvement; relying on existing markets, products and services. Just under half are also bringing in external expertise.
- 71% have grown in the last year of which 38% experienced double digit growth
Our survey respondents expect in the next two years:
- 18% expect to grow aggressively and quickly
- 65% expect steady growth
- 33% will be exporting in new countries
- 22% will be buying or merging with other domestic companies
- 18% will have significantly changed the business model
While the majority currently use bank lending and internal sources they are also considering alternative sources of funding:
- 23% would consider bringing in other families or family offices
- 22% would consider bringing in private equity
- 17% would consider listing all or part of the business on a stock exchange or placing shares with chosen institutions
Legacy, purpose, values
Protecting the family business is a priority, but what families want from their legacy is evolving.
- 82% long term goal is to protect the business as the most important family asset
- 58% long term goal is to create employment for the wider community
- 52% long term goal is to become environmentally sustainable
The majority have a clear sense of purpose and agreed company values. These are seen to impact in areas of staff retention/recruitment, business reputation, profitability and competitiveness.
- 86% have a clear sense of agreed company values and purpose
- 72% say family values define clear expectations for family members
- 47% have family values and company mission articulated in written form
- 75% are engaged in philanthropic activity above giving money to good causes
- 87% say they are committed and adhere to CSR
Looking ahead
Many of our survey respondents are concerned by external factors such as Brexit and general economic conditions. However, in other areas like innovation and access to skills they feel more able to influence outcomes. Areas like recruitment, retention and reward of talent is a priority going forward along with profitability and innovation.
Survey respondents thought it likely that in the next two years:
- 53% will have made significant steps in terms of digital capabilities
- 49% will have brought in non family professionals to help run business
- 33% will be selling good and services in new countries
Survey respondents important personal and business goals over the next two years include:
- 92% to attract and retain the best talent for the business
- 74% to improve profitability
- 64% to offer a compelling reward system for employees
- 63% to be more innovative
- 57% to contribute to the community and leave a positive legacy
Digital Challenges
Similar to the global average, 53% plan significant steps in digital capabilities in the next two years.
Survey respondents identified the following digital challenges in the next two years:
- 37% identify cyber security as a significant challenge
- 29% identify digitalisation as a challenge
- 21% identify data management as a challenge
- 12% identify growth in artificial intelligence / robotics as a challenge
Succession
More than half have the next generation working in the business and a similar number intend to pass on management and/or ownership.
Grappling with succession, survey respondents told us:
- 59% have the next generation working in the business
- 69% expect the next generation to gain experience from outside the business
- 18% have a robust, documented and communicated plan in place
- 38% have a succession plan in place (but not documented/ communicated)
- 40% have no succession plan in place
Gender diversity
A diverse workforce creates more opportunities within any organisation and the tone is set from the top. 48% of our survey respondents had the personal / business goal for the next two years to promote diversity.
Asked about gender diversity within their business, our survey respondents told us on average:
- 17% of the board are women
- 26% of the management team are women
- 19% of the next generation working in the business are women
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