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Family businesses on the wane; Fewer family businesses are being passed on to successive generations, a new report finds

Family businesses on the wane

Fewer family businesses are being passed on to successive generations, a new report finds

Family businesses will contribute more than £120bn to the UK economy by 2018 Photo: AFP

By Rebecca Burn-Callander, Enterprise Editor

7:00AM BST 20 Jun 2014

Family businesses are no longer being passed down to the third generation, new research has found.

The ‘Second Generation Family SMEs in the UK’ report, compiled by Barclays and Cebr, showed that the number of businesses handed on to the next generation has fallen by 136,000 since 2007.

There are currently 570,000 small businesses under family ownership for one generation or more in the UK. Seven in ten of these have been in the family for two generations, while just 29pc have made it through to the third generation and beyond.

However, there is still appetite for family business in the UK. In its survey of more than 2,000 UK adults, the report found one in three people would start a business with a relative, rising to 40pc of 18-34 year olds.

Siblings proved the most popular business partners with 27pc of the vote, followed by fathers with 9pc, and mothers with 7pc.

However, while 61pc would want to pass on a family business to the younger generation in their family, 23pc of those over 55 feared that the younger generation would not want to inherit it.

Rebecca McNeil, director of business lending and enterprise at Barclays, said: “By 2018 these businesses will contribute over £120bn to the UK economy so it’s important that they are supported.”

 

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About bambooinnovator
KB Kee is the Managing Editor of the Moat Report Asia (www.moatreport.com), a research service focused exclusively on highlighting undervalued wide-moat businesses in Asia; subscribers from North America, Europe, the Oceania and Asia include professional value investors with over $20 billion in asset under management in equities, some of the world’s biggest secretive global hedge fund giants, and savvy private individual investors who are lifelong learners in the art of value investing. KB has been rooted in the principles of value investing for over a decade as an analyst in Asian capital markets. He was head of research and fund manager at a Singapore-based value investment firm. As a member of the investment committee, he helped the firm’s Asia-focused equity funds significantly outperform the benchmark index. He was previously the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. KB has trained CEOs, entrepreneurs, CFOs, management executives in business strategy, value investing, macroeconomic and industry trends, and detecting accounting frauds in Singapore, HK and China. KB was a faculty (accounting) at SMU teaching accounting courses. KB is currently the Chief Investment Officer at an ASX-listed investment holdings company since September 2015, helping to manage the listed Asian equities investments in the Hidden Champions Fund. Disclaimer: This article is for discussion purposes only and does not constitute an offer, recommendation or solicitation to buy or sell any investments, securities, futures or options. All articles in the website reflect the personal opinions of the writer.

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