PwC recently released their eighth annual Family Business Survey. This year, the results shone the spotlight on the potential impact on UK family businesses in the wake of the Brexit vote.

The survey showed that family firms are facing new challenges, but that they remain confident and optimistic about what the future holds, as well as passing down their businesses through the generations. However, some may underestimate the impact of short-term challenges that have arisen since the EU referendum.   

Although over a third of UK family businesses are concerned about the effects of Brexit, more than 90% say that they are still anticipating robust growth. The spectre of Brexit has not affected their pre-referendum forecasts - 93% of family businesses expect to see considerable growth in the next five years, and 94% say that they are certain of seeing significant growth of their core business in existing markets.

Brexit has also failed to dampen export ambitions, with UK family businesses predicting that their collective exports, as well as a proportion of their overall sales, will increase from 19% to 24% over the next five years.

Commenting on the Family Business Survey findings, Sian Steele, UK Family Business Leader, says:

“Despite tough economic conditions and the accelerating pace of change, the family business sector remains vibrant and ambitious, with almost one-in-five (18%) expecting to grow quickly and aggressively.”

However, this unfailing confidence may suggest that some family businesses are underestimating the impact of Brexit on their business’ forecast – as less than half of all UK family businesses have taken any measures to mitigate the potential impact that leaving the EU may have on their business activities. Sian Steele says that Brexit needs to be considered in order for a business to thrive in a changing economic market:

“In some areas, UK family firms are not demonstrating the resilience of their global counterparts. It’s also of concern that so few plan to diversify in their current core markets, or have strategies to combat digital disruption. It will be interesting to see how these plans are impacted by new trade agreements being brokered post-Brexit, but overall, it does raise concerns about the survival of some of these businesses.”

However, the confidence of family businesses may be due to a deep-seated belief in the importance of family values and the strength of community. Eight in 10 feel that they have stronger culture and values than non-family businesses, while seven in 10 feel that they are more streamlined, have a quicker decision-making process, and take a longer-term approach to decision making than non-family businesses.

Clare Stirzaker, UK Family Governance Leader at PwC, says that these strong values coupled with a long-term strategy, are the key to success:

“A robust, documented, and well communicated succession plan, will stand the best chance of success. The next generation are the future. They bring continuity of family and business, new ideas, energy and enthusiasm. Engage them at the right time, support and nurture them and, crucially, talk to them about the shared value and purpose in the role they play.”

Sian Steele concluded:

“Family businesses are certainly up for a challenge, and those that we speak to feel confident and excited about the future and the opportunities that it poses. There is no room for complacency, and those that survive from generation to generation focus on robust, strategic planning, taking them from where they are to where they need to be in the long-term. The family firm also has to tackle issues around the family itself. Here, the issues are more personal, more complex, and the risks if it goes wrong are potentially terminal - ‘family firms fail for family reasons’.”

IOEE’s Chief Executive, Sarah Trouten, said:

“I’m delighted to see this research being conducted by PwC in to Family Businesses. Family businesses contribute hugely to the UK economy and as such we should be providing the correct tools and resources equipping them to become stronger more resilient businesses thus able to grow, succeed and contribute to UK PLC.”