Executive Summary – The UK Family Business

Family businesses account for two-thirds of firms in the UK private sector…


There are 3 million family businesses in the UK, or two in three of all private sector firms, and they are made up predominantly of Small and Medium-sized Enterprises (SME).

…helping to generate a significant economic impact

Family firms are concentrated most strongly in particular sectors…

The highest sector concentrations are in agriculture and extraction (89%), hotels and restaurants (85%), and in wholesale and retail (77%). The sectors with the highest absolute number of firms are business services (including real estate) and construction.

…and make up at least half of all firms in each UK region

The South East (499,000) and London (466,000) have the highest number of family businesses. The East Midlands and Northern Ireland have the highest concentration of family firms (78%), while the West Midlands has the lowest (58%).

During the recession demand for credit rose, but family firms were more successful in obtaining external finance…

  1. According to survey data, the proportion of SME family businesses that applied for finance over the previous year rose from 18% in 2008 to 30% in 2010.
  2. Survey data show that 76% of family firms that applied for external finance in 2010 were successful compared to 68% of non-family firms.

…and family businesses appeared less vulnerable to corporate dissolutions

Insolvency rates rose in family firms, but they are lower for family firms across all size bands than for their non- family counterparts, possibly a reflection of stronger balance-sheet fundamentals prior to the recession.

2 Institute for Family Business

Policy summary for the family business sector