April 17, 2014 - Rachel Miller
First generation family-owned SMEs are set to see their revenues rise significantly in the next few years, according to a report by Barclays Business.
The report, Family Affair: Spotlight on UK Family SMEs, has been conducted by Barclays Business and the Centre for Economics and Business Research (CEBR). It reveals that there are currently 2.42 million first generation family small businesses in the UK, up from 2.32 million in 2011 and the highest number since the recession took hold in 2008, when the figure stood at 2.45 million.
The report predicts that family business revenues will rise from £540 billion a year to £661 billion by 2018. It also predicts that the number of family firms will increase to 2.65 million by 2018.
According to the report, first generation family firms currently contribute £180 billion a year to the UK economy and this will increase by 21% in the next few years, rising to £38 billion by 2018. The value of family SMEs as a group is currently greater than that of the overall manufacturing and wholesale or retail sectors.
Rebecca McNeil, director of business lending and enterprise at Barclays Business, said: "Family SMEs play a powerful role in the UK economy and one that is set to increase if they have the right access to support and funding. Whether they aspire to become a household name like J Sainsbury or Arcadia or simply to provide a strong income for their own family, they offer the country value through both their economic contribution as well as their employment opportunities."
First-generation family SMEs make a sizeable contribution to UK employment, and this contribution is also set to rise. There are currently 5.5 million jobs provided by these small family firms in the UK. By 2018 this will increase by 9% to six million.
The UK sector with the biggest concentration of family firms is business and finance, followed by hotels and restaurants, construction and manufacturing.