Family businesses contributed £598bn to UK GDP in 2017, or 28% of the whole UK economy in that year, according to a new report.
A report by the Institute for Family Business Research Foundation (IFB) revealed that family firms generated £1.7tn in revenue in 2017 and contributed £183bn in taxes - more than the NHS budget that year.
The State of the Nation Report also revealed that family businesses in the wholesale, retail trade and repair sector generated 35.7% of all UK family business’ turnover (£593bn) in 2017 - the highest proportion of any sector - and employed 2.3 million people at over 450,000 firms.
The report revealed that family SMEs are more likely to have female leaders than non-family firms: 81% of family SMEs, compared to 58% in non-family SMEs, reported having at least one female director, owner or partner.
IFB director general Elizabeth Bagger called for more support for smaller family firms, given their importance to the economy.
“Family businesses are at the heart of communities across the country. This new report shows they are a vital force in our economy too - and how their continued growth will benefit the UK as a whole. Wholesale, retail trade and repair family businesses create a substantial proportion of employment, and we are proud to champion and delighted to celebrate this incredible contribution,” she said.
“As a country we need to help more of our smaller family firms to overcome the barriers they face and support them in scaling up and successfully transferring ownership through the generations. For those first generation family businesses looking at succession for the first time, it’s important too to realise that you aren’t alone. There are successful, multigenerational family businesses all around the country who you can learn from.
“The family business sector offers so much potential for long term growth. Championing and supporting our mid-sized firms, and helping smaller family businesses to scale up, must be a priority as we look at what our economy will look like in the years ahead.”