According to a study by Tenon Forum, 60 per cent of entrepreneurs invite family members to become part of the business.
In addition, more than a third of relatives will become part of the company as official employees and a further 13 per cent will involve themselves as investors.
Michaela Johns, Director of Business Services at Tenon, says: ‘It’s great to see that 21st Century family businesses are flourishing in the UK despite the many unique challenges they face each day.’
But in a warning to family enterprise, she continues: ‘Family businesses should seek solid, objective advice from outside the family circle to best ensure success and growth.
‘Most critically, they should be wary of shoe-horning relatives into hereditary roles that they are not well-equipped or appropriately skilled for.’
Tenon’s research also revealed that the larger firms were less likely to have family involvement.
Some 69 per cent of companies with a turnover under £1 million included relatives in the business but the figure for firms with a turnover of £20 million or more was just 18 per cent.
Family SMEs make up 65 per cent of private sector companies
Family businesses account for up to 65 per cent of private sector companies and one in three jobs, according to new research.
The findings from the Institute for Family Business (IFB) show that there are three million businesses run by families with the vast majority classed as SMEs and 56 per cent of these are sole traders.
Grant Gordon, director general of the IFB, says: ‘It is imperative that government and policy makers recognise the vital role that family businesses play, and we will be looking to work closely with the government to bolster further the family business sector for the benefit of all.’
Over nine million people are employed by family businesses and these organisations are also breeding grounds for entrepreneurial flair and talent, claims the IFB.
The body used the example of the twin Barclay brothers as a family business success story.
The pair became millionaires through their ownership and running of companies like the Daily Telegraph and Littlewoods.
According to the Sunday Times Rich List, the pair’s combined wealth is supposed to total £1.8 billion.
See also: Start-ups need family and friends