The latest survey from Family Business United has identified the key challenges that are being addressed by family business leaders in board rooms up and down the country. The past year has continued to present plenty of challenges to family business owners throughout the UK and despite their response it is still a difficult environment for many, with prevailing uncertainty adding to the burden.
We wanted to get a picture of the issues that are facing family businesses to highlight the complex agenda that is being addressed. The results are in and whilst some of the key challenges are not surprising, there are some challenges that are seen as more important than may have been expected.
The 2021 Family Business Survey not only sought to look at the key issues that are keeping family business owners awake at night but also looked at some specific areas in more detail: sustainability, recruitment, hybrid working, investment and being a family business during the pandemic.
The Top Challenges Facing UK Family Businesses Today:
The economic climate (53%)
Recruiting, retaining and motivating staff (51%)
Rising costs of labour and raw materials (47%)
Supply chain disruption (42%)
Regulation, red tape and legislation (39%)
Challenges associated with Brexit (36%)
Environmental issues (30%)
Sustainability and the road to net zero (30%)
Cyber security (28%)
Marketing, PR and social media (23%)
Domestic competition (23%)
Profitability and sustainability of the business (21%)
As Paul Andrews, Founder and CEO of Family Business United explains, “These results give us a broad indication of the challenges being faced by family business owners as the pandemic continues to have an impact. It is well documented that the past year or so has been incredibly challenging, even for those family firms that have continued to operate throughout, and the boardroom agenda is packed with challenges that do need to be addressed.”
“Along with the ongoing issues associated with the economic climate, Brexit and the pandemic there are specific issues coming to the fore around supply chains, rising costs of raw materials and labour and in some cases labour shortages.”
“Family firms have shown their resilience and entrepreneurship over the last year or so and continue to be innovative in their business decisions but it is clear that there are concerns. Cash is, and always will be king, and with the need to repay loans, deferred rates and tax bills, and the return to work for more employees, it is clear that there are longer term concerns around profitability and sustainability.”
“Much talk is going on around climate change and the environment and these issues are on the agenda, which is great to see, and we are also seeing more active consideration on business practices and changes that can be made to make a real difference too.”
“Clearly people are important to the family business and in many ways the workforce are looked upon as the extension of the family but plenty of people issues are on the agenda around the UK. Businesses have spent a lot of time and effort engaging with staff, communicating with them and managing new ways of working but as restrictions ease and the numbers returning to the office rise, challenges around safety in the office, balancing working from home and in the office, hybrid solutions and continued engagement with the workforce are high on the list of things to address.”
“Looking to the longer term, businesses are also investing for the future with many focusing on strengthening management and the board so that the business has the best people on board to drive the business as they build forward. Within the family, identifying and developing future leaders as part of the succession planning process still needs to be done. During the pandemic, many senior family members have got more involved in the business and not stepped back as previously planned, and these plans need to be revisited by some firms too and new plans/timetables put in place for a smooth transition to the next generation.”
“However, speaking to many leaders from multi-generational family firms it is clear that history is helping as they have had to deal with significant challenges in the past, and as many see themselves as custodians of the business for future generations, it is great to hear them talk positively and optimistically about the future too with many believing that being a family business has helped over the past year or so and with aligned purpose and values, will undoubtedly help going forward. It is not going to be easy and there are inevitably challenges ahead, but the agenda is set and there is an incredibly positivity and resilience to survive and thrive as family businesses look to the future and address their own family business agenda, one step at a time,” concludes Paul.
As Lyn Calder, Edinburgh Managing Partner & Head of Family Businesses at Anderson Anderson & Brown, sponsors of the 2021 Family Business Survey adds, “Family businesses are the engine room of the national economy supporting the nation through the provision of jobs, generation of income and wealth creation. They are also significantly involved in the place in which they do business and are a real force for good in communities the length and breadth of the UK”
As Lyn concludes, “Many family firms across the UK have faced significant challenges before, especially those that have passed down for many generations and undoubtedly will continue to do so. The business environment is changing, and will continue to change as firms seek to embrace their responsibilities on their sustainability journey, but they will continue to react, adapt and embrace change to meet the challenges they face and to continue to be a force for good and make a significant contribution to the recovery of the nation. The survey clearly identifies the challenges faced by business owners around the UK and helps people appreciate that they are not alone in facing these challenges and it is great to be able to further understand the concerns of this rich, vibrant and diverse sector of the economy.”
Download and read the full report below: