An interesting report was published this week, regarding the importance of family businesses to the UK economy.

We know from experience that the UK independent dealer sector, is one which is populated by more than its fair share of family run and owned businesses. I'm not sure if there's any actual figures available which could categorically put a number on it, but I'm confident to wager my hat that it's officially 'a lot'.

With that impressive maths in mind, this new report by the Institute for Family Business Research Foundation made fascinating reading, revealing the sizeable contribution family firms continue to make to the UK economy.

The headline statistic from the report is that more than 13 million people work in family firms. A sector which the report focuses on, which they term "agriculture and extraction", apparently contains over 155,000 family-owned businesses, employing 400,000 people.

In total family businesses contributed £598 billion to UK GDP in 2017, which impressively was 28 per cent of the whole UK economy in that year.

Speaking about the new report which you can read in full here, Institute for Family Business Director General Elizabeth Bagger said, “Family businesses are at the heart of communities across the country. And this new report shows they are a vital force in our economy too - and how their continued growth will benefit the UK as a whole."

Elizabath Bagger also identified a problem inherent in family businesses though - succession planning. She said, "As a country we need to help more of our smaller family firms to overcome the barriers they face, and support them in scaling up and successfully transferring ownership through the generations.

“For those first generation family businesses looking at succession for the first time, it’s important too to realise that you aren’t alone. There are successful, multigenerational family businesses all around the country who you can learn from."

We know that this issue of succession is one which can prove problematic and is a very real concern for many dealers. For all the examples in our sector of dealerships with a family name which has stayed above the door, with family members still at the helm for multiple generations, there are of course countless examples over the years of companies closing their doors for good because there was no succession in place.

You may remember last year at the Service Dealer conference, Sara Hey tackling this subject in her breakout session. I know through subsequently speaking to several dealers who attended this workshop, that it left a real impression on them - prompting them to start taking a serious look at their own dealership's circumstances.

Sara talked about the fundamentals of getting the next generation interested in coming into the family business. She said, "Engage your children early and often in conversations about the business, to help pique their interest, and don’t just talk around the dinner table about the bad things that happen in a day’s work.

“Remind them why you or your family started or joined the business, and as they grow older find some ‘entry-level’ things for them to do to start joining in. Talk openly and often about what your succession plan is."

Sara went on to explain, "Whether you’re passing on your company or selling it, consider how you can effectively transfer its legacy and values. Succession planning is an integral part of two bigger conversations – business planning and training planning. A unified plan should address these interlinked subjects."

She also warned, "Established customer relationships won’t automatically transfer easily, while employees may be more loyal to the people who started the dealership rather than the business itself.

"Ensure there is a handover plan in place: if there isn’t this can be one of the most challenging aspects of transferring a business."

Listening to Sara last year, there was no doubt that whilst succession is a complex and potentially difficult hurdle which many dealers will need to negotiate - it's by no means impossible. Through being open and honest with your potential successors, a mutually agreeable onwards path can be found.

Like many problems though, it's probably one best facing up to and addressing now rather than letting it fester on the back-burner, until it's too late.