New research has found that 80% of UK builders now work for their family business.
The study by IronmongeryDirect, the UK’s largest supplier of specialist ironmongery, surveyed workers across the nation to discover the current scale of family firms and whether they will continue to be widespread in the coming years.
It also found that 65% of builders want the family business to continue beyond their career, and say that they would like their children to carry on the firm once they retire.
Across all trades, almost two in five (38%) UK tradespeople work for their family companies.
Oxford Economics reports that 18% of all UK family franchises are found in the construction sector – more than any other industry – and this prevalence looks set to remain.
A third (33%) of tradespeople say they would like to pass their company on to their children, according to IronmongeryDirect’s findings. Furthermore, the number of people working for family firms looks to be increasing, with over half (52%) of 18-24s doing so, compared to just a quarter (25%) of over 45s.
Workers in some trades are far more likely to inherit their relative’s business than others. Bricklayers top the list (63%), followed by plasterers (50%) and carpenters (48%), while plumbers are at the other end of the table, at just 17%.
The trades where people are most and least likely to work for their family business are:
- Bricklayer – 63%
- Plasterer – 50%
- Carpenter – 48%
- Joiner – 48%
- Builder – 41%
- Landscaper – 39%
- Caretaker – 38%
- Locksmith – 38%
- Electrician – 35%
- Building surveyor – 35%
- Painter decorator – 25%
- Plumber – 17%
When the time comes for a tradesperson to pass on their business to a relative, there can be lots to think about and the process is not always straightforward. In fact, just one in eight (12%) tradespeople said it was easy to inherit their family business.
With this in mind, IronmongeryDirect has partnered with Rick Smith, managing director at Forbes Burton and a business consultancy expert, to share advice for people looking to continue their family firm.
Do your homework
“Ensure you do your due diligence and conduct a comprehensive appraisal of the business to see any risks and problems you will be inheriting.
“Make sure that you are able to look at all existing financials. This includes past, present, and future tradings, KPIs and any cashflow forecasts that they might have.”
Document the process
“Ensure it is a documented transition and everything is written down. Make sure to include all the uncomfortable points that are not often discussed with relatives. Any pain points should be assessed, agreed upon and then documented accordingly so it’s clear what is being handed over.”
Pick up existing relationships
“It’s important that there is some continuity, so make sure to have a thorough handover. You should spend time understanding the business’ important and valuable client, customer and supplier relationships and then plan how you can best carry on or renegotiate these once you take over.”
Charlie Carlton, Digital Director at IronmongeryDirect, said: “Family businesses represent an important and significant section of the trade industry, and our research suggests that this won’t be changing anytime soon.
“However, it’s important that people follow established processes when inheriting family firms so that the transition is official. That’s why we’ve partnered with Forbes Burton to share expert advice to smooth the handover.”
For more expert advice on inheriting a family trade business, visit: https://www.ironmongerydirect.co.uk/blog/how-to-take-over-a-family-trade-business
