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Succession is top of mind as confident family businesses look to the future

Succession is top of mind...

More than a third (34%) of UK family businesses intend to pass ownership of their business to the next generation.


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According to the European Family Business Barometer, a survey of more than 1600 Europe-based family businesses produced by KPMG Enterprise and European Family Business (EFB), 31% of UK family businesses plan to pass on management responsibilities to the next generation, compared to 33% of their European counterparts. Only 27% of all respondents in the research say they intend to transfer oversight responsibilities, perhaps suggesting the senior generation would like to keep a close watch on the business for a while longer.

Succession is poised to become a critical topic for family businesses across Europe over the next 5 to 10 years. It’s estimated that US$15.4 trillion will be transferred globally by 2030; US$3.2 trillion of which will be transferred in Europe. 

While 84% of the respondents say they currently have a family member as president or CEO, only 62% believe a family member will occupy that role in the years to come. More than half (54%) of UK respondents felt that relinquishing ownership due to the emotional attachment would be the most difficult aspect of the transition compared to a third (37%) of their European counterparts.

Commenting on the findings, Tom McGinness, KPMG Partner and Global Co-leader for KPMG Enterprise Family Business, said :

 “Older family businesses still have family members in charge, but this may become less common in the future. Families will increasingly feel that they need outside expertise to help the business navigate a complex and constantly changing environment. As businesses grow more global and more digital, external executive leadership can bring the experience, skills and independent perspective needed to innovate, take strategic risks, and prosper.”

Confidence remains

The research found that UK family businesses were confident of the economic outlook for their businesses over the next year (62%). According to the findings, confidence is especially high among family businesses in Ireland (91%), Portugal (78%) and the Netherlands (67%). However, in Germany, where recession fears continue to take hold and industrial orders in some sectors have been declining over the past few months, family businesses have begun to pull back and slow down their spending. Reflecting this mood, only 51% of German respondents expressed confidence in the year ahead.

One of the factors driving business confidence among Europe’s family businesses is the fact that turnovermremains strong. 59% of total respondents report that turnover increased over the past 12 months — up from 58% in 2018 and 54% in 2016. 28% said turnover remained steady over the last year, a slight improvement over the previous two years.

Political uncertainty was cited as a high area of concern by 69% of UK respondents, compared to 51% of respondents across Europe. UK respondents are also more concerned about currency instability (42%) than their European peers (32%).

More than one-third (37%) of family businesses surveyed for the report had increased international activity over the past 12 months, led by those in Croatia, Belgium, Ireland and Austria. That’s up slightly from 2018 (34%) but still well below the 65% seen in 2016’s report. Respondents from Germany, Finland and the UK were least likely to have reported increased international activity. International activity remains an important part of many family businesses’ strategy moving forward. 67% of UK family businesses said they were looking to enter new geographical markets over the next two years, compared to just 35% of their European counterparts.

Tom McGinness commented:

“Family businesses are a critical part of the European economy. In some European countries, the majority of companies are family businesses — and together, they form a vast and diverse group across Europe, from tiny two-person operations to huge organisations that span the globe and employ thousands. Like all businesses, family businesses across Europe are operating in uncertain conditions with the prospect of an economic slowdown on the horizon. For many family businesses, which have been passed through the generations, this confidence is borne from their history, and the fact that they have been through and survived tough conditions before. Despite these many challenges, it is encouraging to see that family businesses remain positive about the future and are choosing to focus on their core business in the 12 months ahead.”

Profits mean growth

Family businesses in the UK are choosing to self-fund growth plans over bank or equity financing with over two-thirds (76%) highlighting retention of profits as the most attractive form of funding for their businesses.

Just 49% of European based family businesses opted for the same funding route, with 41% looking to bank financing compared to 35% of UK respondents.

The report found that less than one in five (19%) UK family businesses would use personal/family equity or loan financing for their business, compared to 35% of their European counterparts.

Innovation, training and education, and diversification are key priorities as they adapt to a fast-changing world, with 96% of UK family businesses putting innovation at the heart of their focus for next few years, compared to 72% of their European counterparts. Educating and training their workforce was the second priority for 94% of UK family businesses compared to 64% of European based respondents, whilst 83% of UK respondents said diversifying products and services would be important going forward, compared to 50% of European family businesses who responded.

“Family businesses want to keep control when it comes to financing further expansion or other investments in their businesses, which makes sense, given the current economic climate and the fact that they tend to be more risk averse and often much better at planning for the long‑term. However, as family businesses get larger we do see them turning to more external funding reflecting the realisation that as a business and its ambitions grow, its need for funding can only be met by turning to capital markets.

“Family businesses are well practiced at long term survival, which they know relies on their ability to innovate and adapt to an uncertain and rapidly changing business environment. Innovation and workforce training are closely linked with businesses needing the right people and skills to drive new models forward. Family businesses are hugely loyal to their workforce and investing in training and education will not only help to retain a motivated workforce, but is absolutely vital, to help to drive growth particularly as new technologies such as AI come on board.”


The report can be found at :


For more information, contact:

Emma Murray, KPMG press office

T: +44 (0)20 7694 6506


KPMG Enterprise:

Miles Davies, Director

T: +44 (0)20 76948415


Darius Movaghar, European Family Businesses

T: + 32 (0)2 893 97 10


About the Barometer

The European Family Business Barometer is based on the responses of an online survey from 1,613 questionnaires which were received from family businesses across 27 European countries from 13 May─19 July 2019.

About European Family Businesses (EFB)

European Family Businesses (EFB) is the federation of national associations representing long-term family owned enterprises, including small, medium-sized and larger companies. EFB represents 1 trillion euros in aggregated turnover, which is 9% of European GDP.  EFB’s mission is to press for policies that recognise the fundamental contribution of family businesses in Europe’s economy and create a level playing field when compared to other types of companies.



About KPMG Enterprise

Passion, it’s what drives entrepreneurs, family businesses and fast-growing companies alike. It’s also what inspires KPMG Enterprise advisers to help you drive success.

You know KPMG, you might not know KPMG Enterprise. KPMG Enterprise advisers in member firms around the world are dedicated to working with businesses like yours. Whether you’re an entrepreneur looking to get started, an innovative, fast-growing company, or an established company looking to an exit, KPMG Enterprise advisers understand what is important to you and can help you navigate your challenges – no matter the size or stage of your business. You gain access to KPMG’s global resources through a single point of contact – a trusted adviser to your company. It’s a local touch with a global reach.


KPMG Enterprise Global Center of Excellence for Family Business

As with your family, your business doesn’t stand still — it evolves. Family businesses are unique and KPMG Enterprise Family Business advisers understand the dynamics of a successful family business and work with you to provide tailored advice and experienced guidance to help you succeed.

To support the unique needs of family businesses, KPMG Enterprise coordinates with a global network of member firms dedicated to offering relevant information and advice to family-owned companies. We understand that the nature of a family business is inherently different from a non-family business and requires an approach that considers the family component.


© 2021 KPMG LLP a UK limited liability partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

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