A majority of family firms in the UK have seen growth over the last year according to a new report published by business advisory firm PwC.
In all three-quarters of family firms recorded growth over a 12-month period, with a third saying they needed to professionalise their business over the next five years.
The report, The Family Factor: Professionalising the UK Family Firm, found that, in the short term, the prospects for UK family businesses are good, but continued success will depend on their ability to further professionalise their business by keeping pace with technological change and formalising succession planning.
The biannual report reveals three quarters of family businesses reported growth in the last twelve months, compared to 47 per cent in the 2012 survey.
The growth plans of UK family firms are also more ambitious in 2014 compared to two years ago, with 90 per cent looking to expand in the next five years, compared with 81 per cent in the 2012 survey.
There is evidence that family businesses in the UK understand the need to keep pace with technological advances with 80 per cent recognising the growing impact of digital technologies.
But only 46 per cent per cent of UK family firms say they understand the business benefits of moving to a digital strategy and only over a quarter (28 per cent) recognise that they need to attract the right talent to help them do this.
Chris Romans, partner and head of private business at PwC in the Midlands, said: “After weathering the economic storms of the last few years, family businesses are coming out of survival mode and are beginning to look at what they need to change in a new, more competitive business environment.
“There’s evidence that later generation businesses are less likely to take risks with the family firm and focus more on the day to day running of the existing businesses, so it will be in a good shape for succession. This may potentially be at the expense of innovation and, in today’s environment, no business can afford to stand still.
“However, what we find with Midlands family businesses is they are very dynamic and able to move quickly to seize opportunities as the market picks up.”