Two-thirds of British family businesses could be sold off because there's no one left to take over, a landmark report has found
The UK is home to 3m family businesses, generating more than £1.1trillion in annual revenue Photo: AFP
The UK's family businesses are facing a succession crisis.
Two-thirds of bosses at the nation's family firms have warned that they are thinking of selling up because they can’t hand over the reins to someone within the family.
According to the 2014 Family Business Survey, produced by Family Business Place (FBP) in partnership with law firm Charles Russell Speechlys, which surveyed 5,000 family business owners from across the UK, 65pc of respondents are considering selling the family business.
A lack of succession planning, which includes a strategy for bringing the next generation into the business effectively, or managing relationships with children who have no interest or aptitude for the business, prompted 55pc of the bosses at these companies to cite succession as the biggest issue they face.
Ninety per cent of the family business owners surveyed have no governance structure or succession plans in place, leaving them open to potential conflicts or problems. The report added that this situation was a "serious concern" for the UK.
Thinking about succession can be so daunting for many family business owners that it is just ignored until it is too late and discord is inevitable," said Sally Ashford, a senior associate at Charles Russell Speechlys.
Family business owners also reported friction between younger family members wanting to push ahead, take risks or utilise new technology, and older, more conservative family members not wanting to jeopardise the status quo.
Some 8pc of those surveyed reported that sibling rivalry caused the most difficulties in their businesses, while almost 30pc blamed the next generation for causing problems.
Disagreements over money were the most pressing issue for 10pc of those surveyed, while in-laws were cited as problematic in the running of the business by fewer than 5pc.
According to the research, one part of the family frequently wants to grow the business while other family members want to maintain a good lifestyle.
Resolving these issues is difficult given the emotional bonds involved, the report claimed. The FBP found that while two-thirds of UK family businesses have a board of directors in place, 73pc have failed to appoint any non-family members to their board. Some 80pc have no non-executive directors to provide independent counsel.
The UK is home to 3m family businesses, generating more than £1.1trillion in annual revenue and employing 9.2m people.