Family businesses in Lancashire are confident and positive about the future, according to the results of a new survey released today by leading East Lancs accountants PM+M.
The survey, carried out in conjunction with Praxity, the largest global alliance of independent accountancy firms, revealed that the profitability of family businesses had increased during the past year with 65% of those questioned describing their financial position as “good” or “excellent”.
Most family businesses expected the economic situation in the UK to improve over the next 12 months. Very few respondents expected the economy to get worse within the next year.
Jim Akrill, Partner in charge of the Family Business team at PM+M commented, “Our survey is extremely positive and encouraging. Family Businesses are the lifeblood of the Lancashire and UK economy and, if they are confident about the future, then that really is very good news.”
He added: “Whilst there are clearly challenges ahead, family businesses across the county seem to be in very robust health, providing more evidence that confidence is returning to the economy and well-run family businesses will be perfectly positioned to take advantage of this”.
Most of the survey respondents supported the statement that “A family shares similar attitudes and values and can therefore develop a strong culture within its business”. The survey also found that the majority of respondents believed that: “There is greater continuity of leadership through family members”, thus providing greater certainty for the business and its employees.
Jim commented: “There was also another striking aspect to our survey. Strong governance and leadership is arguably the most important aspect of any successful business. Despite this, the survey indicated that the vast majority of family businesses have no documented comprehensive strategic plans or family agreements. This could potentially lead to conflict or confusion for family businesses.”
The survey results highlight that, for family businesses which can often have strong cultures and leadership, disagreements and the emotion generated by them can be reduced by setting up a Family Constitution.
Also high on the agenda was planning for the next generation, the majority of respondents anticipated that the next management succession change would take place within 10 years. Unfortunately, 68% indicated that they had not undertaken any formal succession planning.
This may come as no surprise given that many families have been simply concentrating on getting the business through the recession. But as the economy improves, and as the focus on business values returns, the family business will have more time to devote to these important considerations.
“It is clear that many people involved in family businesses share similar concerns and experiences which are not found elsewhere in the private sector. The family business survey shows that they are not alone, that support is available and that there are strong signs of optimism for the future.”