Blog

The majority of family businesses in the UK expect sales to grow over the next two years. More than eight in ten companies expect to expand in 2022. British family businesses did more to support employees than their international counterparts during the lockdown, with 86% saying they were “keeping as many employees as possible”, according to a new report.

Family businesses have traditionally been focused on creating long-term value for generations to come – an approach that increasing evidence suggests is well positioned to adapt to the negative impact the coronavirus is having on their businesses. In early 2021, a report by KPMG found that the unique structures of family businesses meant that they were less affected by the pandemic and that the downsizing of family businesses was almost 2% lower than that of non-family businesses as a result.

A new study by rival PwC has now further underscored the elasticity of family businesses, with the finding that the majority will expect sales growth this year. After 53% of the companies surveyed grew in a challenging 2020, PwC found that the same number of UK family businesses are expected to grow in 2021. While this is below the global average of similar companies, many are optimistic that they will keep pace with their growth in overseas equivalents through 2022, with 86% of UK-based and international family businesses saying they will grow over the next year calculate.

Suzi Woolfson, PwC’s Private Business Partner, commented, “Your first instincts may come as a surprise, but family businesses tend to be much more agile than some large companies. You think long-term, but you can also make decisions quickly in the moment – and it is crucial that you can implement these decisions quickly. In areas of high demand, we found companies to speed up production significantly in a matter of weeks. “

One of the reasons why UK family businesses are recovering somewhat more slowly than international companies is that they appear to have been more committed to helping employees through the crisis. PwC found that over 10% more UK family businesses allowed their workers to work remotely, while 15% fewer international family businesses reported “keeping as many employees as possible” compared to 86% of UK family businesses.

To pay for this, UK companies had to use government support twice as many to top up their employees’ salaries. 54% of UK family businesses have cut dividends for family shareholders – 20% less than overseas. Looking ahead, UK family businesses hope to gain a foothold among their global counterparts by investing in new innovations and business strategies.

Hannah Harris, Head of the PwC UK Family Business, commented: “The Covid-19 pandemic has shown that UK family businesses remain resilient in the face of a crisis. This is underscored by the efforts they have made to retain employees, provide additional assistance to employees, and make financial sacrifices. As society slowly moves towards some sort of normalcy, family businesses will seek to build on their digital skills while managing family dynamics and investing in more sustainable business practices. “