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: