Accountancy firm PwC says family businesses should upgrade “processes, governance and skills” to compete with market entrants and to stay relevant in the changing business landscape.

The warning is contained in a report entitled ‘The Family Factor: Professionalising the family firm’. Research for the report found that UK family businesses lag other countries in several key areas.

For example, it found that just 13% had a succession plan, 8% plan to expand quickly in the next five years and only 22% want to pass on the firm to a new generation but add professional management too.

The contrast in places like China, where 57% of family businesses plan aggressive expansion in coming years. On average, UK firms derive 16% of turnover in overseas markets, compared to a global average of 25%.

Sian Steele, partner at PwC said: “Many businesses today need to survive on thinner margins, identify and address potential threats early, and innovate and adapt faster. It’s tough for any business, but can be an even greater challenge for some families.”