Family business is the backbone of our economy, representing an overwhelming number of all business enterprises and one-half of our gross domestic product. However, most family-owned businesses are challenged to survive past the current generation of ownership. Experts indicate that over two-thirds of all family-owned businesses do not successfully transition from the first to the second generation, and 90 percent do not survive until the third generation.
The sorry track record of family business succession is due to many factors, but a chief cause is the lack of leadership from the current owner and spouse. The fact is too many business owners do not think through the risk to the continuity of their business from the death or disability of a key person, do not adequately protect the business from litigation, fail to develop a workable buy-sell plan and do not take their focus off of day-to-day management issues to address the often delicate family decisions essential to fostering a successful business transition. Why? Because these issues are uncomfortable to deal with and often require external leadership from an advisor team unemotional about the owner’s situation who can speak frankly to all of the family members.
We can help your family business by serving as the unemotional counselor, evaluating the strengths and weaknesses of the family business, eliminating the risk of loss of a key family member and designing a comprehensive transition plan that considers all the elements of a good plan: sales price, future ownership structure, estate transfer, income taxes, and much more.
Do not let your family business become another fatal statistic. Invest the time and money to develop the right business plan to protect your family business for many more generations to come.
