A recent survey commissioned by leading accountancy firm, Albert Goodman, highlights family businesses are feeling confident and positive about the future.
The survey, carried out in conjunction with Praxity, the largest global network of independent accountancy firms, reveals that 65 per cent of family businesses are enjoying improved finances and increased profitability over the past year.
The survey also revealed family businesses believe reinvesting is key, with nine in ten businesses reinvesting profits to support growth for the long term.
Head of Family Business at Albert Goodman, Paul Hake, comments on the survey results, “It is very positive that the survey confirms what we see in our local family business clients every day; that the majority of family businesses are going for growth and are reinvesting profits. Family businesses are the lifeblood of Somerset’s economy, accounting for more than 75 per cent of private sector businesses in the area. The survey provides yet more evidence that confidence is returning to the economy and well-run family businesses are perfectly positioned to take advantage of this.”
However, the survey highlighted the majority of family businesses have no documented strategic plans or family agreements, and that there is a significant lack of succession planning amongst the region’s family businesses.
It is reported that 68 per cent of family businesses have not yet planned the future management and ownership structure of their business. This comes despite seven in ten of the businesses surveyed expecting to keep the business within the family – whether this is by ‘gifting’ the business to the next generation, or by ‘selling’ the business to another family member.
Paul adds, “It is a real concern that so many family businesses have not considered succession and don’t have any plans in place, which could lead to family conflicts.”
“Addressing the issue can be as simple as a series of discussions around the kitchen table or the more formal creation of a Family Constitution – either of which reduces scope for disagreements, and identifies and assesses and develops key family members and other staff for their future roles. We can’t stress enough the importance of the region’s family businesses planning for the future – it makes growing the business much easier and keeps you one step ahead of your competitors.”