Over a third, 34 per cent, of family businesses intend to pass ownership of their business to the next generation, research from professional services firm KPMG has found.
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 per cent of UK family businesses plan to also pass on management responsibilities to the next generation.
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.”
While 84 per cent of the respondents say they currently have a family member as president or CEO, only 62 per cent believe a family member will occupy that role in the years to come.
More than half, 54 per cent, of UK respondents felt that relinquishing ownership due to the emotional attachment would be the most difficult aspect of the transition.
Innovation is the dominant strategic focus, with 96 per cent of UK family businesses putting innovation at the heart of their plans for next few years, compared to 72 per cent of their European counterparts, with training and education, 94 per cent, and diversification, 83 per cent, also key priorities.
Family businesses are choosing to self-fund growth plans, over bank or equity financing, with over three quarters, 76 per cent, highlighting retention of profits as the most attractive form of funding for their businesses. A third, 35 per cent, will consider bank funding and less than one in five, 19 per cent, would use personal/family equity or loan financing for their business.