Why Family Businesses Matter Family businesses make a significant contribution to the UK’s economy – it has been estimated that family businesses employ 13.9 million people, turnover £1.7 trillion, contribute £225 billion in tax revenue and add £575 million to economic output annually 1 .
Alongside this hard economic data, family businesses deliver important qualitative outcomes that exemplify their importance to UK plc:
l Strong family brands . Many of the UK’s family businesses have been passed down several generations and the maintenance of family ownership has created strong family brands that are the cornerstones of UK business. The high-quality products and services produced by family businesses positively contribute to the UK’s reputation as a country that values high standards. l Good, career enhancing jobs. Family businesses are committed to their employees and their wellbeing. Just as many family businesses have successfully been passed down several generations, it is not uncommon for relatives and generations of the same families to be employees in the same company. For many, family businesses are an employer of choice. Their loyalty is reflective of the good, career enhancing opportunities family businesses provide to communities up and down the country. l Innovative approaches. The unique family business model – where profits are retained in the business – enables family businesses to invest in innovation and technology. Rather than having to meet short-term shareholder interests, family businesses have the freedom to experiment, to implement innovative approaches; get ahead of market dynamics; and drive economic growth. l Community involvement. Family businesses have formed and scaled within their communities, ensuring a special bond with the communities they represent. This bond is evidenced through the long-standing involvement of local families within many communities. Family businesses are aware of the importance of giving back to their communities – both directly (through meaningful employment) and indirectly (through charitable endeavours). l International power. Many of the UK’s family businesses export to countries across the globe and the longevity of these businesses and the trust placed in family names opens doors to significant international opportunities. For many overseas businesses – particularly those operating in Asia – the opportunity to work closely with family members with ‘skin in the game’ facilitates trust, confidence and credible trading relationships. In a world of growing global tension and protectionism, the value of family businesses’ international power cannot be underestimated.
The importance of employee welfare is something family businesses prioritise. We have a history of supporting employees, including previous generations establishing a trust to support ex-employees prior to the establishment of the modern welfare state.
5th generation family business outlining their commitment to employee welfare.
1 FBUK, 2023 , 2024 Manifesto - Taking the long-term view https://www.familybusinessuk.org/wp-content/uploads/2024/05/FBUK-2024-Manifesto-Rev2.pdf
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