Laying the foundations for future generations
– One in five medium sized firms in the UK are third generation family businesses.
– A total of 162,000 small businesses in the country have been passed down by their founders to their grandchildren.
– Grandparents’ Day falls on 5th October in the UK.
Britain is a nation that likes to celebrate the things passed down by previous generations: pearls of wisdom, habits with money, stories of a different time – but what about businesses?
Ahead of National Grandparents’ Day on 5th October, Barclays research looks at the influence of entrepreneurial grandparents sowing the seeds for successful small businesses and the impact of on the UK economy.
Barclays Business Family Affair research found seven in ten (71%) family-run SMEs have been in the family for more than one generation, passed down from parents to their children. Moreover, close to a third (29%) made it to the third generation, having been passed down from the founders to their grandchildren, keeping business in the blood.
The Family Affair report found second generation or older family businesses are most prevalent in the construction and agriculture sectors and in total are worth an estimated £102bn to the UK economy.
Barclays research went on to find that the next generation of grannies and granddads would love to share their business success with their family, with three in five UK adults (61%) stating they would like pass on a family business to the younger generation if they had the opportunity. However 23% of those over 55 years old hold fears that the younger generation would not want to inherit.
Rebecca McNeil, head of business lending and enterprise at Barclays, said: “Family businesses are at the heart of the UK economy and it’s important that those wanting to survive beyond the first and second generation are prepared. It’s never too early to put a succession plan in place – it is a topic that people are reluctant to talk about but an important step to make. Many family businesses face the challenge of an ever changing business landscape, bringing new systems, technology and changing customer needs. This is where new generations can help to offer a fresh perspective.
“We advise SMEs to seek specialist advice on matters such as financial planning, tax and legal issues to help them put a viable succession plan in place. It doesn’t have to be an arduous or expensive process, but it does need to be considered far earlier and in a more formal way that many family run business account for.”
One business in particular has not only banked with Barclays for 92 years but is now run by the original owner’s grandson.
Case study:
David Roberts’ Shoes, a traditional shoe store based in Llandudno opened in 1922 has banked with Barclays for 92 years after the business was given an initial loan to purchase premises – the family still have the original Barclays bank passbook in their possession. The independent footwear retailer provides quality footwear for both men and women and is currently run by Andrew Roberts, grandson of founder David Roberts who once worked as head shoe buyer for Harrods. Barclays is lending to Andrew to refurbish the premises.
Rebecca McNeil continued: “It’s great to see that small businesses at the heart of local communities for many decades can thrive after being passed down, while maintaining original identity. Passing down a business can bring with it an immense sense of pride and provides a legacy left by the grandparents and great grandparents for the rest of the family in addition to serving the local area.
“At Barclays we understand that the importance of supporting family businesses in order for them to thrive and generate revenue. We provide a number of regional workshops and seminars that can help businesses with anything from thriving online to helping with their online marketing.”
