Nearly 60 per cent of SME bosses involve a relative in the business, according to research by consultancy firm the Tenon Forum.
The survey found that over a third of UK entrepreneurs have a family member as an official employee, while around 13 per cent use relatives as investors.
The report also found that around eight per cent of these family members are offering their services for free.
"It's great to see that 21st century family businesses are flourishing in the UK despite the many unique challenges they face each day," said Michaela Johns, director of business services at Tenon Forum.
"But whether finding new ways to compete with larger competitors or ensuring the business complies with a vast array of government legislation, family businesses should seek solid, objective advice from outside the family circle to best ensure success and growth."
