Success and familiness go hand in hand according to new research                         

Against the backdrop of the toughest economic times in living memory, family businesses seem to be not only surviving, but thriving, according to research conducted by law firm Veale Wasbrough Vizards (VWV) and the University of the West of England (UWE).

Their 2011 National Family Business Report identifies that family businesses have proved well able to survive the credit crunch and shown that financial resilience and a commitment to the future are attributes of the family business. The message from these businesses has been that the outlook is bright, with over 50% actually reporting that they had increased both market share and profitability during these tough economic times.

Of the 233 family businesses who responded to the survey, over half were not concerned about raising finance or the availability of funds at a time when other businesses seem to be struggling with financing and cashflow.

Dr Lorna Collins of UWE said: "Opportunities to reach a global market have been grabbed with both hands by family businesses with over 30% reporting that they trade internationally. This challenges the popular misconception that family businesses are small and insular and focused on local markets. On the contrary the family businesses in this survey are demonstrating that they are forward thinking, financially fit and strong players in today's global market."

Nicholas Smith, partner and head of family business at VWV, points to familiness - the unique characteristics that family businesses exhibit, to explain their success.

The positive influence of the family in business shone through the survey results, with 58% of respondents indicated that the primary aim of the family business was to put bread and butter on the table of the immediate family. However over 30% pointed to purely family orientated aims such as building a legacy for future generations (15%). It is this strength and depth of vision which Nicholas believes gives family businesses a competitive edge. Nicholas said: "Family businesses have a strength and depth of vision way beyond immediate revenue building. The sense of custodianship often felt by the current generation gives them a reason for survival beyond their own immediate needs.

“This also provides them with a reason for protecting profits for future generations and I believe it is this that has given them a financial shock absorber needed to survive the recession and outperform their counterparts."

Familiness can also be seen in the decision making process of family businesses where 60% of respondents reported that when making a business decision, family considerations were either more important, equally important or factored in to an appropriate degree, depending on the nature of the decision. Only 37% said that business factors always came first.

Family businesses also demonstrated a high degree of flexibility in their decision making. When asked where family members discuss issues concerning the business, 28% of respondents said they discussed issues at home, with 24% of respondents saying that they discussed issues wherever and whenever they were able to get together. These findings point to a fluidity, flexibility and commitment rarely seen in other businesses.

The survey also found that over 64% of family businesses anticipated a transition to the next generation and of these 50% indicated that a lack of successor and/or training or qualifications were obstacles to succession. Nicholas concluded: “In our experience, engaging in the process of putting governance in place can help the family to talk about and flush out issues of succession and ownership. Ultimately the family business will then be able to plan for succession and build this into its plans for the business and family.

“Too few family businesses engage in actively putting proper governance in place and in planning for succession and all too often this damages the prospects of the business and also family relationships.

“We would encourage family businesses to think about succession and governance as early as possible, thus safeguarding the future of the family for subsequent generations."