Experts estimate that family-owned businesses worldwide contribute more than half of gross domestic product and two-thirds of employment. According to a PwC survey, family-owned businesses also are among the most trusted type of business in America, yet most lack a formal business succession plan that can help keep the peace and ensure continued vitality of the family business for generations to come. Still, only about 30% of family businesses make it to a second generation and 13% last to a third.
This episode of the First Business Bank Podcast includes recommendations to strengthen the future of your family-owned business, including:
- Identifying why family businesses might not continue beyond one generation
- Creating a unifying family vision and mission
- Keeping family matters separate from business, agreeing on consequences in advance
- Embracing transparency and honest communication
- Managing expectations regarding interest and abilities of subsequent generations
- Developing a business succession plan as early as possible with the end in mind, including what-if scenarios
- Deciding which advisors to include in business succession planning
- Preparing for emotional conversations
When the future of the family business is at stake, keeping the family peace by creating a succession plan is critical. Access this episode of the First Business Bank Podcast for important ways to ensure your family business’s longevity. While you’re here, make sure to check out other podcasts and articles on business succession for leaders of closely held businesses.