A strong wind of change is blowing in the business world and the UK is at the forefront of a massive paradigm shift when it comes to what customers perceive to be a trusted provider. As a result of various unethical practices and public controversies, major corporations are starting to lose their appeal in favour of smaller, family owned businesses. More and more people prefer working with local businesses that use transparent manufacturing processes, support the local economy and deliver a personalised service.
If you are thinking of starting a home business in the UK, the market is extremely receptive of this kind of ownership. In fact, 9 out of 10 businesses in the UK are family-owned, according to GrowthBusiness.co.uk, accounting for more than 88% of private companies in Britain. In a time when major corporations are struggling to stay afloat, British family-owned businesses are thriving and generate over a quarter of UK GDP. What’s more, they are an example of innovation and customer service, in a way that’s strikingly similar to Germany’s ‘Mittelstand’ companies, which are famous for their ethical focus.
As proven by the success stories below, UK family owned businesses show more longevity than ever before, even in complicated economic times. Moreover, instead of being crushed by the giant foreign corporations, they have an advantage precisely because they offer something else.
Britain’s most successful family-owned businesses that can inspire you
The Amazon Growing Business Awards celebrated their 20th anniversary in November 2018 and once again acknowledged the most remarkable small and medium sized enterprises in the UK. Among them are Bambino Mio, who make reusable nappies for infants in an effort to reduce carbon footprint, or L J Fairburn and Son, who won the Rural Business of the Year award and stood out through their diverse board team. JustPark, a start-up that helps users find nearby parking spaces, won Innovator of the Year for their contribution to solving Britain’s parking issue, while Food Attraction Limited, a family-based food supplier based in Leicester, won the Family-Owned Business of the Year award.
Apart from these up-and-coming companies, aspiring entrepreneurs should also remember Britain’s key household names, which have consolidated the country’s reputation as one of the friendliest in the world for family-owned enterprises:
- Bestway Group – a food wholesaler (£3.4 billion revenue)
- Specsavers – glasses and contact lenses manufacturer (£1.7 billion revenue)
- John Swire & Sons – diversified business group (£7.96 billion revenue)
- 2 Sisters Food Group – food company (£3.13 billion revenue)
- Pentland Group – sports clothing wholesaler (£2.91 billion revenue)
- Dyson – vacuum and hairdryer manufacturer (£2.51 billion revenue)
These companies might seem intimidating, considering that they make billions in revenue and have expanded overseas, but they have all started out as small, family-owned business. And, in the cases above, the founding family is still on the board and actively involved in the company’s operations.
The core values of a family business
What do all these businesses have in common? Well, apart from a continuous commitment to innovation, they abide by several core values:
- The founding family still has ownership, passed down through generations
- Independent directors that add value to the company
- Strong emotional ties to staff and perpetual attention to their needs
- Customer-driven focus
- Engagement in social initiatives
- Good relationship with regional suppliers and distributors
How to make sure your family business succeeds
The United Kingdom is an excellent market for family-owned business and an innovative idea can turn into a success story. That being said, the simple fact that a business is family-owned is not a fail-safe strategy and in no way does it guarantee a lasting presence on the market. Like any business venture, a family-owned company needs to have streamlined operations, perfect organisation, a detailed business plan and a clear long-term vision.
Plus, there are some challenges that can prove to be problematic for the owners of family businesses, especially when they are just starting out:
Lack of insurance. A business is still a business, even if the main office is your home. Every business asset, from the actual property to the equipment you use, needs to be insured against loss, theft and accidental damage, otherwise you risk losing a lot of money, getting a fine and even shutting down your business. Needless to say, your insurance policy has to offer you excellent coverage and match the needs of the business you run. For example, Quote Radar shop insurance is tailored to the needs of store owners and includes public liability cover, employer’s reliability and product liability.
Transitioning to the second generation. This may not be a pleasant topic to talk about, but the family who runs the business needs to have a clear plan in case something happens to one of the owners. According to a Legal and General analysis, only 42% of UK family-owned businesses have a succession plan in case one of the owners passes away. As a result, 27% of them do not make the transition to the second generation. To ensure your company’s longevity, talk to a business advisor and establish a clear hereditary structure.
Informal business environment and family-only staff. The strong points of a family business can become liabilities if not handled correctly. Family businesses have a friendlier company culture, but this should not translate to the lack of a business plan, lack of discipline or lack of accountability. Also, you should not be forced to hire any family member that wants to join if you feel that they do not match the company’s philosophy.
Separating business from family. Working with your relatives is great, but when personal issues come along, you need to learn to draw the line and separate professional and emotional matters.
Last, but not least, every family-owned business should be open to exterior help, at least in the form of consultancy. As the owner, your voice will always matter, but a business advisor will help you take strategic long-term decisions and take advantage of every growth opportunity.
