More than half of family businesses expect growth in 2021

22 April 2021 Consultancy.uk 3 min. read
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The majority of family businesses in the UK expect to grow revenues in the coming two years, with more than eight-in-ten saying they expect to expand in 2022. According to a new report, British family firms did more to support staff than their international counterparts during the lockdown, with 86% saying they “retained as many staff as possible.”

Family businesses traditionally focus on generating long-term value for generations to come – an approach which mounting evidence suggests positioned them well to adapt to the negative impacts of the coronavirus on their trade. Earlier in 2021, a report from KPMG found that the unique structures of family businesses meant they were hit less hard by the pandemic, and that the reduction in the workforce of family businesses was almost 2% lower than among non-family businesses as a result.

Now, a new study from rival firm PwC has further highlighted the elasticity of family businesses, with the revelation that the majority expect to grow revenues this year. After 53% of companies surveyed achieved growth in a challenging 2020, PwC found that the same number of UK family businesses expect to grow in 2021.

Help and support provided during COVID + Sacrifices made by family shareholders

While that is less than the global average among similar companies, many are optimistic that they will catch up with their overseas equivalents by 2022, with 86% of UK based and international family businesses saying they expected to grow over the course of next year.

Suzi Woolfson, a Partner in PwC’s private business wing, commented, “Your first instinct may be surprise, but family businesses tend to be much more agile than some large corporates. They think about the longer term, but they can also make decisions quickly in the moment – and crucially, they can implement those decisions at pace. In areas with significant demand, we saw businesses accelerating production significantly in a matter of weeks.”

One of the reasons behind the UK’s family businesses enduring a slightly slower recovery than international firms is that they seem to have committed more to supporting staff through the crisis. PwC found that more than 10% more UK family businesses enabled remote working for their workers, while 15% fewer international family businesses said they had “retained as many staff as possible,” compared to 86% of British family firms.

In order to pay for this, twice as many UK companies had to seek government support to top up staff salaries. Meanwhile, 54% of family firms in Britain saw dividends reduced for family shareholders – 20% fewer than their overseas equivalents. Looking ahead, British family firms hope to make ground on their global counterparts by investing in new innovations and business strategies.

PwC UK Family Business Leader Hannah Harris remarked, “The Covid-19 pandemic has shown UK family businesses remain resilient in the face of a crisis, underlined by the efforts they have made to retain staff, provide extra help for employees and make financial sacrifices… With society slowly moving towards some kind of normality, family businesses will look to build on their digital capabilities, while managing family dynamics and looking to invest in more sustainable business practices.”