Family and business – a winning combination?

The United Kingdom has always been a rich and vibrant incubator for entrepreneurs. People from all walks of life with big ideas. But entrepreneurialism isn’t just reserved for the big tech, rocket-building individuals of the world. Oh no. In fact, entire families have been quietly building empires for many generations. A recent survey found the UK boasts 4.8 million family-run companies, employing 13.9 million people and contributing £575 billion to the UK economy (Source: Oxford Economics)

No doubt you will have heard of some of the UK’s biggest family-owned companies –

  • JCB
  • Frasers Group (owners of House of Fraser, Sports Direct, Evans Cycles, Jack Wills, to name a few)
  • Dyson
  • Pentland Group (owners of Speedo, Berghaus and Lacoste)
  • Boparan Group (owners of Carluccios, Gourmet Burger Kitchen and Ed’s Diner)

But you might ask yourself, how can businesses which have seen such huge success and who have grown beyond all recognition still consider themselves family firms? Surely they eventually become just like any other large corporate business, no?

Let’s break down the success of firms like these and explore why their ‘family-ness’ has made them skyrocket compared to other ‘non’ family businesses. These reasons are also what make the UK a great place to do business for family-run companies coming in from overseas.

Born out of necessity

If you trace back the roots of any family business, more often than not their beginnings were accidental. Perhaps someone in the family had a problem and couldn’t find a decent solution already on the market. So they decided to do it themselves. Or maybe they were heavily involved in the local community and realised there was a desperate need for a certain service or product.

For instance, I met two brothers who were so appalled by the quality of local care homes available for their mother that they built one themselves. Now they have 22 homes.  A husband and wife whose cycling club didn’t have a good, reliable place to go for bike repairs so they opened a shop. Now they have a global cycling community. A guy who wanted to spend more time with his father once he retired so they started brewing their own cider together. Three generations later and they are in every supermarket. A woman who was so frustrated with the lack of choice for her son’s hearing aid that she engineered an innovative, new solution. She now exports around the world.

Family firms like these are successful because they knew there was a demand; they experienced it themselves. Having a personal connection gives you your reason, your ‘why’. It gives you drive and motivation to keep going, even when it gets tough.

A long term view

Family businesses don’t work in financial quarters. Even financial years. They work in generations. They are not here to make a quick buck. They exist to provide a livelihood for the family and create wealth for generations to come. So how does that make them more successful?

Basically, they take the time to make good, intelligent decisions which will benefit the business in the long-term. Instead of taking risks and doing something which gives instant gratification but is not necessarily best for the company overall. I once heard about the owner of a British brewery who poured his profits into buying small houses for his future grandchildren (he didn’t have any at the time). Even though his accountant advised him against it because the business itself needed some reinvestment, he bought them anyway. Turns out, his ‘little’ property portfolio is now worth millions and provides subsidised housing to many of its workers. Three of his grandchildren now run the company.

It can be so easy in today’s world to chase the latest trend and jump on a viral bandwagon. But family-run businesses are about building empires, slowly but surely. Growing a business which sustains the family and its dedicated employees for the long-term. Anyone running a family firm will tell you that they don’t actually ‘own’ the business, they are just caretakers for the next generation. Their aim? To leave the company in a better position than when they inherited it.

At the heart of community

Enterprising families usually start companies where they live. Where their kids go to school, where they volunteer, where they worked as a youngster. So when that family business grows, the local community grows with it because their name is above the door and they are personally-connected, they want to give back. Increased employment, investment, infrastructure, philanthropy …. it all goes hand in hand.

For example, imagine you have a family firm who builds a fabric manufacturing plant in the heart of a large town. As demand for innovative fabric grows over the years with the explosion of fashion, so too does the family business so it –

  • Increases revenue therefore contributing more tax
  • Needs to buy more warehouse space from local realtors (and therefore pays more business rates)
  • Provides more jobs, livelihoods, training and skills
  • Buys a bigger fleet of vans from a local dealership
  • Invests in local property
  • Builds a supply chain of local suppliers
  • Donates to local charities, community causes, schools
  • Its national (or global!) success becomes intrinsically-linked to the town encouraging more investment

When you next walk down your local high street, take the time to notice some of the independent shops, restaurants, hairdressers, manufacturers, farmers, hotels etc. Then think about who sponsors the local football team, who donates gifts to all of the charity raffles, who donates meals to the homeless, who gives work experience and jobs to the kids leaving school. You’ll soon see that family firms are the engine room of our local communities.

For overseas family businesses looking to work in the UK, this sense of community also opens doors more easily. If you have a great product/service but need good, reliable, local suppliers to make it happen, you have a vast network of fellow family-run businesses to trade with and get your UK branch off the ground.

There’s an unwritten understanding between family firms that they share the same values and will operate with integrity and trust. This traverses families from all over the world so no matter where you are, you will always be able to find a like-minded business to partner with. Making setting up shop in the UK so much easier.

Agility and innovation

If you’ve ever worked for a large corporate company you’ll know that  innovative ideas can often be met with death by committee. In a family business, entrepreneurship runs through its DNA. Often, the success of the company can be attributed to quick-thinking, proactiveness, innovation and the ability to be agile when required. If a family sees a great idea, and it is aligned with their values, they can act on it instantly. A person once told me ‘I had an idea on the toilet one evening. I messaged my Dad and the next day we started working on it. Within a week it was in full production.’

Whilst things may not always happen THAT quickly as family firms get bigger, there is always an acute sense of the need to keep moving forward in order to survive and thrive into the future. When your name is above the door and you provide a livelihood for hundreds (sometimes thousands) of people, the pressure is on to keep innovating.

My favourite stories are those of family companies which have evolved beyond recognition over the years. Take the carpenter who started out in the 1800s and whose family moved into making coffins and now run a chain of 80 funeral directors. Or the mechanic who started buying second-hand cars in the fifties and whose grandson now runs over 20 dealerships all over the UK. But one of my favourites has to be the farming family who faced financial ruin during the Covid-19 pandemic so turned their hand to making ice cream from their cow’s milk. They now export their ice cream to India. Who’da thought it!

You see, family is everything. And we are lucky enough to live in a country where entrepreneurship is not only encouraged, but absolutely thriving. In fact, I recently launched a business with my eldest daughter, Amalia. Working together to build a luxury brand and take it to market has been thrilling. So I know from personal experience that when you combine family and business, it can be a winning formula. The UK is an exceptional place to start building your own empire or to expand a family firm already established overseas.

Anita Brightley-Hodges.  Family Business Specialist, Mediator & Speaker and now co-founder of luxury, bespoke jewellery business ‘Irene & Jenny

Anita Brightley-Hodges