Access to capital needed to scale family businesses

Almost two in three Irish companies are family run, but Government supports are needed in an increasingly competitive landscape

Ireland’s family businesses are not just economic contributors – they are 'custodians of community wellbeing, multigenerational reinvestment and national resilience'. Picture: iStock

Family businesses form a cornerstone of Ireland’s economy. According to the DCU National Centre for Family Business, these enterprises account for about 60 per cent of all companies in the State. Collectively, they represent more than half of the Republic’s GDP and more than half of its employment.

“These businesses are critical to driving employment, innovation, regional development and social inclusion in our communities making them critical for Ireland’s future sustainable economic growth,” says PwC Private leader John Dillon.

“Amid all the coverage of Ireland’s exposure to foreign-owned firms, it’s worth remembering who Ireland’s biggest employers actually are,” says Family Business Network executive director John McGrane. “In fact, with nearly a million employees, family-owned businesses employ more than twice the aggregate of our FDI companies and the public service combined.

“Family businesses are all around all of us: they’re the people who make your porridge, they’re your local hotel, the garage and the factory. Critically, Ireland’s family businesses employ local, they buy local, they support local and they vote local.”

PwC’s 2025 Irish family business survey revealed that 83 per cent of Irish family businesses expect robust sales growth over the next two years, Dillon notes.

“These organisations have a great commitment to growing their businesses and reinvesting. They are not forced to give immediate return to shareholders on their investment. This patience or ‘patient capital’ shows up in subtle ways, often visible in reinvestment decisions, in owners deferring their own salaries and in a commitment to employees and local communities.”

Family businesses enjoy certain advantages when the going gets tough, he adds. “These advantages include flexibility and agility, coupled with the benefit of relationships developed over generations and strong loyalty among employees.” In addition, a large majority (87 per cent) of respondents to the PwC survey believe their family businesses have higher trust compared to their non-family competitors. This extends to the levels of trust with customers, employees and business partners.

John Dillion, PwC Private leader

“With their strong sense of purpose, strong priority over reputation and legacy, and long-term investment approach, family businesses are uniquely positioned not just to withstand uncertainty but to thrive,” says Dillon.

The strength of the family unit is also important. “After the recent floods we saw family members coming in to help out and get businesses back up and running,” says Eric Clinton, director of the DCU National Centre for Family Business and an associate professor with DCU Business School. “It’s hard to replicate that in non-family businesses.” It’s not all sweetness and light, however, and family firms also suffer from certain inherent weaknesses. “Just about every language has a phrase for rags to riches and back to rags in three generations,” says Clinton. “The sad reality is that family businesses tend not to fail or cease to exist because they are not selling good products or services but mainly because of family dynamics.” The way to avoid that is through governance agreements such as family constitutions, he adds. These agreements acknowledge that family members will fall out from time to time but put in place a mechanism in place to get over it.

More supports are needed to help Irish family businesses further scale their operations so they can remain family owned, Dillon believes. “To build a thriving family business and domestic business sector, Government should focus on three areas; rethink how to access investment capital, build an ecosystem to foster multi-generation ownership, and elevate the sector by initiating an accelerating indigenous enterprise taskforce.” Capital is the life blood of start-ups, and critical for scaling enterprises, but a radically different view on how family businesses can access major capital more easily is needed, he argues.

“Look at how the German government is building an investment fund to fuel their domestic economy, that is co-funded through a combination of exchequer funding, alongside domestic and international private funds at a ratio of circa one to five.”

John McGrane, Family Business Network executive director

Facilitating multigenerational ownership requires a mix of policy measures.

“What we tend to see within our client base is strong Irish companies being acquired by private equity or international trade buyers before they reach their full potential,” says Dillon. At a practical level one of the clearest solutions is reforming employee ownership schemes [such as ESOTs – employee share ownership trusts], which could allow founders without a successor to exit without selling to foreign buyers, keeping ownership in domestic hands.

“Beyond ESOTs, there should be more meaningful entrepreneur relief mechanisms to allow founders to take money off the table mid-cycle, as well as stronger strategic support from the State. The goal should be to make is simpler, and more attractive for Irish companies to scale here, not sell.”

He calls for the same urgency, weight and focus to be applied to the creation, scaling and development of multigenerational family enterprises as has been given to infrastructure through the Accelerating Infrastructure Taskforce.

An accelerating indigenous enterprise taskforce could “focus on identifying all the barriers that prevent indigenous-owned businesses from scaling at international levels, benchmarking the supports available in competitor countries, and identifying the enabling infrastructure needed to truly create a case for Ireland being the best location to start, grow and retain a business of scale,” he says. “Why not take that opportunity now? Why wait?” McGrane agrees: “Ireland’s family businesses are not just economic contributors,” he says. “They’re the custodians of community wellbeing, multigenerational reinvestment and national resilience. We shouldn’t take them for granted – in fact, we should celebrate them and ensure their longevity.

“With the Government committed to [Accelerating Infrastructure Taskforce chair] Sean O’Driscoll’s radical strengthening of cross-departmental effectiveness, we would do well to apply the same leadership to assuring the future our local family-owned employers.”