Family owned businesses have long been the lifeblood of the UK and, indeed, the Yorkshire economy. Here, we celebrate some of the leading family companies in the region which have survived generation after generation.
The longevity and continued success of family businesses fascinates me. Yorkshire has a particular concentration of successful family owned businesses with tens of dozens across the region who have had a strong succession strategy- some have a history extending back hundreds of years. For example, textile mill Hainsworth dates back to the mid 1700s! Roughly 40% of these family firms are, as you might expect, in the manufacturing sector; 20% are in the built environment sector; and just over 10% are in retail.
These family businesses continue to play a key role in the UK’s economy – they account for two in three private sector enterprises or three 3 million firms; they provide jobs for 9.2 million people (two jobs in five in the private sector); they make a very large contribution to the UK economy with a £1.1 trillion turnover, almost a quarter of GDP; and they make up nearly half of all Mid-Sized Businesses (£20m - £500m turnover) in the UK. Family businesses are economic powerhouses - they create jobs, pay taxes and help build vibrant communities but succession planning in family businesses is vital.
Some of the region’s leading companies are, and remain, family businesses. Just think of the Wild family with the renowned Bettys and Taylors of Harrogate brand which is now being marketed throughout the world. There’s also the hugely successful motor retailer JCT600, one of the largest private companies in the UK. Not to mention NG Bailey, the UK's leading independent engineering, IT and facilities services business; international building group Shepherd; Clugston Construction; vegetable oil producer Kerfoot and many more.
One of the key benefits of family businesses is their longevity. Recent research has shown that continued family control can be efficient, since families are able to positively affect the resource inventory and usage of their firms and apply a long-term perspective allowing for unique strategic positioning. I would argue that family businesses also tend to be more entrepreneurial, perhaps because they are fleet of foot. Unlike the bureaucratic constraints imposed on a large corporate, family businesses are able to adapt and take advantage of new opportunities as they arise.
What truly drives many family businesses is the sense of connection and identity the owners and their family members feel with the business. The tenure of leadership in a family enterprise is four to five times longer than its counterparts!
Succession tends to be a key issue for family owner managed businesses – having put their heart and soul into building a business, securing that it is handed in an efficient manner to future generations of the family is paramount. Another frequent concern is protecting the business from the introduction of non-family members although increasingly non-executive directors are being brought in to provide a fresh perspective and often to mentor younger members of the family. In some cases, the family may be planning an exit and, again, professional advice is needed to plan this and ensure it is done in the most efficient way.
Of primary importance among family firm wealth holders is transferring not only their financial wealth, but also their values to subsequent generations. The primary values taught include encouraging children to earn their own money, philanthropy, charitable giving and volunteering. Research shows that the environment for innovation in family businesses improves when more generations of the owning family are actively involved in the business. I was impressed to hear that one of Yorkshire’s most innovative companies, Paxman Coolers, which is pioneering a system to help prevent hair loss during chemotherapy, boasts five members of the family working in the firm. However, the title for most members of the family involved in a Yorkshire business must go to Daval Furniture in Huddersfield with 11 family members!
Two thirds of small businesses in Britain are run by families, but a lack of succession planning means only a fifth ever hand on the baton, according to the Institute for Family Business. The sad truth is that 80% of first-generation companies never make it to the second generation, and only one in ten make it to the third. This is partly because founders often can't let go. The institute says one US entrepreneur only gave his 68-year-old son the power to sign cheques when he reached 92 because his hands were too shaky!
Without the strength of Yorkshire’s family businesses, I believe that the regional economy would not have the dynamism and innovation we see today. They are the bedrock of our success and it is vital that they can continue to invest, grow and adapt. Clarion look forward to helping them sustain their important role in the region’s economy.
Case Study - How we helped a family business attract private equity to grow and develop their business
Business and Personal Protection - Both elements of proection go hand in hand for family business owners so it is essential to ensure you have everything covered and the right documents are in place
If you are a family business and would like to meet with us to discuss how we can help you and your business please contact us via our contact form.
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