The future looks bright for family businesses in Scotland, according to the Institute for Family Businesses (IFB), which says nearly one in 10 of all Scottish firms are family-run – making a significant contribution to the economy.
According to the IFB, family firms throughout the UK are setting their sights on expansion following another highly successful year in which employment and turnover have risen.
It says half of the UK’s family businesses plan to grow their organisations over the next few years and will invest in the skills of their staff to do so.
New research by Oxford Economics for the IFB Research Foundation has revealed the vast contribution family firms make to the UK economy – employing over 11.9 million people and making up 87 percent of all private sector firms in the UK.
There are now more than 290,000 family run firms in Scotland making up almost 10 per cent of all businesses in the area. Family businesses also account for 92 per cent of all private sector firms in the region – one of the highest concentrations in the UK, including firms such as Grants, Baxters, Tunnock’s, DC Thomson.
Since 2013 family businesses have increased employment by six per cent and turnover has also seen a strong rise, increasing by two per cent to reach £1.3 trillion. In addition, family firms paid £125 billion in taxes and contributed over a quarter (26%) of the UK’s entire GDP.
Peter Armitage, chairman of the IFB, said: “The report sheds light on the sheer size and scale of the family business community. It’s an important reminder of how vital family-run firms are to the UK – serving as the backbone of our economy, with family firms making a phenomenal contribution across all sectors, industries and regions.
“Family businesses have always been at the very heart of the UK economy and based on the steady rise in their recruitment and turnover, it is clear they are here to stay. It’s encouraging to see family firms with such a buoyant attitude towards their future expansion – almost half of family SMEs expect to grow over the next two to three years.”
Growth and expansion is a top priority for many SME family firms with just under half (49%) stating they aim to grow over the next twelve months.
Looking to how they will turn this ambition into reality just under a half of firms (43%) say they will invest in improving the skills of their workforce to support growth, with a third (33%) planning to boost productivity through investing in new machinery and premises.
Looking beyond their traditional activities to diversify their business and customer base, 42% of family firms are planning to move into new markets and 37% are developing and launching new products and services.