Families in business have long been a cornerstone of both small enterprises and local communities. While many started from modest beginnings, several well-known brands- such as Clarks, Timpson, and Specsavers- were once small generational companies built on robust family values.
In the UK, family businesses represent approximately 90% of all private sector firms, employing nearly 14 million people (ONS data). They also contribute over £200 billion in tax receipts annually (Oxford Economics), highlighting their significant role in the economy.
Recent Challenges and Market Shifts
Despite the challenges in recent years posed by the pandemic and geopolitical uncertainty- including operational challenges, rising energy costs, inflation, and frequent tax changes- family businesses have continued to grow steadily and they remain dynamic platforms of opportunity for people from diverse backgrounds, making them vital to the UK business landscape.
A Better Business Model?
With the freedom to adopt a long-term investment strategy and adapt their approach, family-run firms are in an ideal position to drive transformative change. Without the same market pressures as listed companies, family businesses can take a long-term approach to investing and are in a prime position to adapt strategies to unlock the potential for creating jobs and developing local communities.
Family-Owned Businesses on the Rise
Over the past five years, family businesses have seen a notable increase in both number and influence. According to the Institute for Family Business, the UK alone has witnessed a 10% rise in the number of family-owned firms since 2018, reflecting a growing trend towards entrepreneurial ventures rooted in family values.
This surge is not just in quantity; family businesses now account for nearly 30% of the UK's private sector GDP (Oxford Economics). This upward trajectory suggests that more entrepreneurs are choosing the stability and flexibility offered by family ownership, while also capitalising on the long-term vision and resilience that such businesses can provide in a volatile market.
Starting a Family Business
While generational companies may be a less common feature of the modern business landscape, many of today’s family businesses are formed from sibling or spousal partnerships, often where one or both partners have the skills, experience and expertise to start their own company. However, the legal and compliance obligations of starting and managing a business may be new and often confusing territory, and this is where new companies need the most support when getting their idea off the ground.
Registering Your Business
When you start a company with your spouse or family members, you may choose to set up a Limited Liability Partnership with 2 or more shareholders and/or directors, and whether you incorporate a limited company, partnership, or another business structure will have a bearing on your future liabilities, filing requirements, and tax. Learn about the difference between LLPs and limited companies on our Knowledge Base, where you’ll also find many more articles about setting up your own business.
Managing Tax and Business Finances
The unique nature of family-owned businesses demands tailored financial strategies to manage tax compliance and ensure long-term success. If you have already started a business and require support with tax filing, this is where specialised tax filing services can help to streamline compliance and reduce costs for micro and family-run businesses.
With the right financial solutions in place, family businesses can not only navigate challenging times but also unlock the potential for sustained growth, all while focusing on what matters most—building a legacy for future generations.
We Help Families to Get Started in Business
Our services provide comprehensive solutions for newly formed companies, from business registration and securing a professional business address, to filing accounts and confirmation statements with Companies House, we provide the tools and expertise you need to establish a successful family business and maintain compliance.
Ready to take the first step? Get in touch or visit Easy Digital Company to find out more about how we can support you in building your family business.
