Running a family business can have its benefits and also challenges. As many companies have faced difficulties throughout the pandemic, it seems that family businesses have been steaming ahead and performing better than expected. Whether you’ve started the business yourself or have inherited it from your parents or even grandparents, there are many reasons that family businesses have experienced success during these challenging times.
What is a Family Business?
Simply put, a family business is one that is owned or run by members of the same family. They tend to remain in existence for a long period of time when compares to sole entrepreneurship businesses, because customers see them as stable. Recent research showed 30% of family business proceeds to the second generation, while 12% proceed to the third. When compared to sole entrepreneurship or partnership, these businesses tend to cease existing in the case of death or termination of the partnership.
Family businesses are in it for the long haul, which is why they have repeat custom that other corporations find it hard to achieve. However, it’s important to remember that having a family business has its own set of unique challenges too, often stemming from disagreements between members.
Are there Many Family Businesses Operating in the UK?
Whether you’re a regular customer of one or have only shopped at them a handful of times, there are family businesses all over the UK. In 2018, there were 5.1 million family-owned businesses in the UK, split between micro, small, medium and large sizes.
It’s interesting to know that nearly 4.1 million of those were micro businesses with no employees. Perhaps this is one of the keys to success? Can working solely with a family member be more beneficial than having multiple employees? It still remains that family ownership is more common among smaller firms. However, with how well some have performed during the pandemic, could this change in the future?
How Family Businesses have Become Stronger During Difficult Times
Not only do you have your family around you, but you’re likely to have an unspoken bond that you wouldn’t necessarily have with a business partner or friend. There are a number of factors that make family run businesses strong, especially when facing challenging or adverse times like these.
You’re likely to have a strong psychological and strategic connection, having come from the same blood, as well as mutual financial management styles. All of these are important factors or success. Where money is concerned, being on the same page will always be a triumph. Whether you have a joint account which allow families and partners to manage their savings and business collaboratively, or other type of financial management system, working harmoniously will put you on the road to success.
Although running a family business can be tricky at times, there are so many benefits to doing so that will keep your business running for generations to come.