More than a third (34%) of family businesses intend to pass ownership of their business to the next generation, new research from KPMG has revealed.
According to the European Family Business Barometer, a survey of more than 1,600 family businesses in Europe, produced by KPMG and European Family Business (EFB), 31% of UK family businesses plan to also pass on management responsibilities to the next generation.
While 84% of the respondents said they currently have a family member as president or CEO, only 62% believe a family member will occupy that role in the years to come.
More than half (54%) of UK respondents felt that relinquishing ownership due to the emotional attachment would be the most difficult aspect of the transition.
Commenting on the findings, Ian Beaumont, who leads KPMG’s family business practice in the North, said: “In Yorkshire many long established family businesses still have family members in charge, but this may become less common in the future.
"Families will increasingly feel that they need outside expertise to help the business navigate a complex and changing environment. As businesses become increasingly global and digital, external executive leadership can bring the experience, skills and independent perspective needed to innovate, take strategic risks, and prosper.”
Innovation is the dominant strategic focus, with 96% of UK family businesses putting innovation at the heart of their plans for next few years, compared to 72% of their European counterparts, with training and education (94%), and diversification (83%) also key priorities as they adapt to a fast-changing world.
Mr Beaumont commented “Family businesses tend to want to maintain control when it comes to financing expansion or other investments in their businesses, which makes sense given the current economic climate and the fact that they tend to be more risk averse, as well as often better at planning for the long‑term than other businesses.
"However, as they grow we see them turning to more external funding reflecting the realisation that as a business and its ambitions scale, its need for funding may be best met by turning to capital markets.”