Revival Of Traditional Family Businesses

Almost a quarter of business owners have employed relatives in recent months according to latest research – sparking a revival of traditional family businesses. The study of 500 small business owners found that of the 23 per cent who took on a family member, 46 per cent hired their partner, while 55 per cent recruited a sibling.

And one in 10 even asked for help from their in-laws. Almost half (46 per cent) employed relatives during lockdown because they needed extra help, while 34 per cent felt their loved ones had the skills they were looking for.

Other reasons included the family member wanting to gain work experience or because they were struggling to find work after finishing education during the pandemic.

The research, commissioned by Funding Circle, found the family employment typically lasted seven weeks, but 68 per cent still have their relative working for them.

And while 21 per cent are considering taking them on full time following this experience, 45 per cent would look at hiring more relatives in the future. It also emerged that as a result of this, more than a fifth would like to see more traditional family businesses making a comeback.

Lisa Jacobs, Funding Circle’s UK managing director, said: “Family sits at the heart of many successful small businesses. One of the silver linings of this crisis might be a revival of the traditional family business, with relatives spending more time together as business colleagues and partners as well as at home.”

The research also found more than a third of small business owners admitted their relative worked harder than they expected them to. More than a quarter said their relative’s working attitude was respectful and 22 per cent said they seemed enthusiastic. Similarly, 32 per cent of owners said working with their relation was fun and 30 per cent felt it was motivating, yet 12 per cent described it as difficult at times.

And although 31 per cent of those polled said taking on their loved one was positive for their family relationship, three in 10 struggled to be ‘boss’ to them. When it came to family perks, 41 per cent of bosses admitted they gave their family member flexible hours, 24 per cent offered longer breaks and 30 per cent even gave them a free lunch.

The findings come after a separate study of 1,500 relatives of small business owners found that of the 23 per cent who were taken on by their family, a third found it motivating.

Popular family businesses were found to fall into the sectors of retail, business, consulting and management, and creative arts and design. And for 62 per cent of ‘employees’ the new role with their relative was something completely different to their usual job.

For a fifth, their new ‘boss’ was their dad, while a tenth had their mum to answer to and 14 per cent were ‘hired’ by their uncle.

More than a third even said the experience has made them want to be more involved with the family business and 31 per cent feel encouraged to start their own company.

But 44 per cent admitted they now realise how much work goes into running a business, according to the OnePoll figures. More than a quarter found themselves helping out a relative because they were on furlough, while 28 per cent had always had an interest in it and now had the time.

Positives of working for a family member included being able to act completely themselves (35 per cent), spending more time with family (40 per cent) and feeling less pressure (30 per cent).

Professor Alfredo de Massis, a family business expert from the Free University of Bolzano and Lancaster University, added: “The results emphasise the crucial importance of family involvement in business during particularly challenging times.”

“My own recent research into 3,500 firms from all over the world showed that family firms have been more resilient than their non-family counterparts during the pandemic and lockdown.”

“The reasons behind this have to be found in their long-term orientation, family-centred non-economic goals and strong values handed over across generations.”