Britain’s family-owned small businesses are among the fastest growing of all enterprises in the country and will contribute more than £200bn a year to the UK economy by 2018.
According to the Institute for Family Business (IFB), family firms account for two-thirds of UK private sector businesses, providing more than nine million jobs, generating revenues of £1.1trn and contributing to 25% of the country’s total GDP. All of which is good news for the very large numbers of family run mortgage brokers and other family run firms in the lending space.
Family firms now make up 19% of the companies in the Fortune Global 500 list, but how does any family run business get from a small operation to making this illustrious list and how can those of us who are family run, capitalise on the benefits that this presents?
Family run businesses are typically more profitable than other company models as the firm’s owners tend to be more interested in growing something for future generations than taking a short-term dividend. Highly successful family firms are also renowned for loyalty, dedication, a strong vision and clear values according to the IFB. These key characteristics are likely to attract clients back again and again, especially within the sphere of financial services, where the media continually prints reports concerning issues of trust.
We certainly seem to be witnessing these upsides at Hope Capital. As a family run firm operating for nearly four years, we have used the suppleness of being family run to be more flexible than many other firms in terms of who we lend to and what we lend on. This seems to have paid off and as a result we more than doubled our loan book last year, and with a very strong start in 2015 we are tenfold up on the first two months of last year.
There are many advantages to using a family run business that operates on family funds. At Hope, for example, we use our own funds on every loan and are able to make decisions and complete a bridging loan within incredibly short timescales.
Mortgage brokers too can benefit from an increased level of flexibility in terms of levels of service to the client, which can have a clear effect on the way the client is treated. By its very nature, a family business has to be run on respect and trust and with these ethics passed onto the customer it can have a profound impact on your relationship with them.
It’s no surprise that family run businesses account for two thirds of all businesses around the world as so many customers prefer the hands-on approach with people who are personally accountable and able to make quick decisions. Companies with strong ‘family values’ are taking on new meaning in today’s economy.
They also attract the top talent in the industry as they provide more flexibility and a less constrained working environment than many organisations, with direct benefits to customers. If you’re able to recognise that value, and work for the common good, family can be your biggest competitive advantage.
So if you’re operating a family run business, you are in the best position to take advantage of the many factors that can contribute to the success of your business. If you’re not, and you have the opportunity to bring a driven member of your family into your operation, you may just find it is the best move you’ve ever made.
