Entrepreneurs favour friends over family
Many family firms do not survive beyond third generation
Modern entrepreneurs prefer to go into business with friends rather than family members, new research reveals.
Suggesting a shift from the traditional dominance of family businesses in the UK, the survey by Venture Finance shows 67% of small firm owners would prefer to set up a new enterprise with friends instead of family.
The report also reveals around half of entrepreneurs have started up with mates in the past, compared to only 27% running a company with relatives.
Venture Finance said the results demonstrate the changing face of small businesses.
Although family-run firms still account for the majority of SMEs in the UK, many do not survive beyond the third generation because of family-related issues such as disagreements about succession arrangements.
Steve Wedsdale, director of Venture Finance, said: “In our opinion, one reason for the change from family to friendship-run businesses is that entrepreneurs now have far more funding options than before.
“This accessibility to finance is supporting more people in their desire to run their own company. It also removes previous reliance on other family members and creates more diverse business partnerships.”