Are Family-Owned Businesses Planning for the Future?

The 2007/2008 Family Business Study conducted by PricewaterhouseCoopers found that nearly half of family-owned businesses have no succession plan in place, despite 25% of them expecting to change hands within the next five years.

The majority of family businesses do not make it to the next generation and either are sold or cease operations upon the founder’s death. According to the Cox Family Enterprise Center at Kennesaw State University in Georgia, only one-third of family businesses, worldwide, are passed along to the next generation.

PricewaterhouseCoopers argues that family-owned businesses do not make it from one generation to the next because of a lack of planning.

Businesses are encouraged to create an exit strategy. For succession, outline the details for family members to join management and also encourage the successors to be involved in the business now.

An exit strategy to sell the business also requires careful planning. Business owners should seek guidance from their attorney, accountant and business broker.

~Sunbelt Business Connections Newsletter