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Survey Reveals Concern for Family Businesses as Brexit Nears

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According to a nationwide study titled A State of the Nation – The UK Family Business Sector 2017-18 – family-run businesses account for 88% of all UK firms. They operate in every industrial sector across all of the UK’s regions, employing almost half of the UK’s private-sector workforce. In no small part, the UK’s family and regional businesses represent a significant proportion of Britain’s bottom line.

Capital Step has released an exclusive, nationally representative survey of 2,005 Brits, dissecting the nation’s attitudes towards family-run businesses, and the wider infrastructure available to them. Factors investigated range from funding options and support structures to the impact of Brexit on Britain’s ‘bread and butter’ economy.

Key stats 

  • Six in 10 Brits (62%) believe that the UK government does not support regional and/or family-run businesses as much as it does more corporate entities in the private sector
  • Nearly two thirds (63%) believe that the UK high street is suffering as a result of family run and/or regional businesses not receiving adequate support from local council and government
  • Over half  (55%) think the recent growth in technology businesses has taken exposure away from the family and/or regional businesses that investors would have previously considered to support
  • Over a third (35%) of Brits said that all or the majority of family-run businesses that they are aware of have gone out of business over the last decade
  • Over a third (35%) don’t think family and/or regional businesses would know where to go to acquire vital finance to help their businesses
  • Over a quarter of Brits (26%) have investable assets (excluding property and pension) that they would rather invest into a family run and/or regional business than anything else
  • Two in five people (41%) think Brexit has the potential to break family and/or regional businesses
  • Two in five people (41%) think Brexit has the potential to have a severely detrimental effect family and/or regional businesses

Brexit’s impact on family businesses

With Brexit only months away, the recent Autumn Budget put measures in place to boost Britain’s High Streets. However, Capital Step can reveal that British sentiment towards Brexit’s potential effect on the UK’s family and regional businesses is one of overriding concern:

  • Two in five (41%) think Brexit has the potential to break family and/or regional businesses
  • Over half of Millennials (52%) think Brexit has the potential to break family and/or regional businesses. Over four in 10 (42%) of 35-54s and a third (32%) of over 55s agree with this statement
  • Half of 18-34s (48%) think Brexit has the potential to have a severely detrimental effect on family and/or regional business. 44% of 35-54s and a third (32%) of over 55s agree with this statement as well

Capital Step’s research has shown an overwhelming desire by millennials to preserve the family business, with nearly four in 10 18 to 34 year olds who have investable assets (excluding their property and pension) stating they would rather invest into a family run and/or regional business than any other asset class or corporate entity.

Generational breakdown

  • Two thirds (66%) of over 55s believe that the UK government does not support regional and/or family-run businesses as much as it does more corporate entities in the private sector
  • 61% of millennials – 18-34s – also feel this way. (59% for 35-54s)
  • Nearly seven in 10 (69%) of over 55s believe  that the UK high street is suffering as a result of family run and/or regional businesses not receiving adequate support from local council and government. For 35-54s, 60% agree and 58% of Millennials also concur with this statement
  • Over four in 10 (43%) millennials (18-34s) have seen all or the majority of family-run businesses that they are aware of have gone out of business over the last decade. A third (33%) of 35-54s agree with this statement, as do three in 10 (29%) over 55s
  • Over half of millennials (51%) don’t think family and/or regional businesses would know where to go to acquire vital finance to help their businesses. A third of 35-54s (33%) agree with this statement, as do a quarter (24%) of over 55s
  • Nearly four in 10 (38%) millennials have investable assets (excluding their property and pension) that they would rather invest into a family run and/or regional business than anything else. Over a quarter of 35-54s agree (26%) with this statement, as well as 15% of over 55s
  • Over half of millennials (52%) think Brexit has the potential to break family and/or regional businesses. Over four in 10 (42%) of 35-54s and a third (32%) of over 55s agree with this statement
  • Half of 18-34s (48%) think Brexit has the potential to have a severely detrimental effect family and/or regional business. 44% of 35-54s and a third (32%) of over 55s agree with this statement as well
  • Two-thirds of millennials (62%), half of 35-54s (51%) and over 55s (53%) think the recent growth in technology businesses has taken exposure away from the family and/or regional businesses that investors would have previously considered to support

Jonathan Schneider, Executive Chairman and Co-Founder of Capital Step, said on the research.

“Family-run and regional businesses form the life-blood of the UK’s entrepreneurial landscape, and to see so many believe that the Government is not looking after this vital sector of the UK’s business community is concerning. Equally it is apparent that the funding options available to established, family-run enterprise seems to be eclipsed in local communities by corporate entities who have greater exposure to the most appropriate funding options.

“The role of family enterprise, community SMEs and bricks and mortar productivity across the length and breadth of the British Isles must be considered a firm priority for the UK government – deal or no deal. Transitioning the immediate aftermath of Brexit will be an acutely sensitive process; ensuring the foundations for a business community that can thrive and scale in the long term will lead the charge for a successful post-Brexit future – the UK economy is only as strong the businesses and communities that upholds it.”

In response to the data, Capital Step has launched The Family Finance Review – a nationwide funding initiative that encourages the UK’s family and regionally driven enterprise to step forward to discuss growth finance that does not dilute their ownership or control.