The biggest nightmare faced by family firms is the influence external shareholders might have on their business, according to a survey.

And the same bosses are also worried about external shareholder greed.

This emerged from the PRIMA International Research Report published by business and financial advisers Grant Thornton.

Some 6,519 international owner-managers, of which 488 were from UK family businesses, were asked to prioritise their 15 "business nightmares".

In the UK, the top two nightmares identified related to external shareholder influence. Some 35 per cent of owner- managers surveyed expressed concern over the way that external shareholders could affect the management of their business. And 34 per cent of owner-managers expressed concern over the greed of external shareholders.

Roland Clark, Grant Thornton partner and regional PRIMA consultant based at the firm's Bradford office, warns that venture capitalists and owner-managed businesses need to recognise the mutual benefits that their relationship can provide.

He said: "From our research, it would appear that family businesses are failing to understand the benefits that external shareholders can bring. Equally there may be a need for external shareholders, like venture capitalists, to alleviate certain fears of UK owner-managers.

The PRIMA International Research Report was co-ordinated and written by Sue Birley, Professor of Entrepreneurship at Imperial College, London University. She said: "In the UK we may simply be seeing more sophisticated fears, based on a more highly-developed business environment and a greater knowledge on the part of the owner-manager."

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.