ONLY about 30 per cent of family-run businesses survive into a second generation, and a mere 13 per cent make it through to third generation.
These statistics come as a wake-up call to most family business owners, who hope that their son or daughter may take over the reins one day.
So what’s to blame for ‘killing’ these once successful businesses? It is, quite simply, lack of succession planning.
Sooner or later, everyone wants to retire. But if you own a family business, retirement isn’t just a matter of deciding not to go to work any more.
ONLY about 30 per cent of family-run businesses survive into a second generation, and a mere 13 per cent make it through to third generation.
These statistics come as a wake-up call to most family business owners, who hope that their son or daughter may take over the reins one day.
So what’s to blame for ‘killing’ these once successful businesses? It is, quite simply, lack of succession planning.
Sooner or later, everyone wants to retire. But if you own a family business, retirement isn’t just a matter of deciding not to go to work any more. Besides ensuring that you have enough money to retire on, the whole question of what happens to the business becomes paramount.
For a family business, transition is a once-in-a-lifetime decision.
But beware! The devil is in the detail. The reason that more than 70 per cent of family-owned businesses do not survive is because of the lack of proper and well thought through succession planning. If family owned businesses are to survive and the legacy preserved, options other than simply handing the business to the kids need to be considered.
As the business founder, you see your pension as coming from your company. Why shouldn’t it? You’ve worked hard to build it. But what shape will this take?
* Your children may simply not want to take over the business; increasingly children of business owners want to pursue their own careers outside the family business
* Your children may want to keep working in the business, but may not want to take over total responsibility for the whole thing. How then are you to genuinely retire?
* Even if your children do want to take over, how can you extract sufficient cash from the business to provide for the comfortable retirement that you desire?
With family businesses, succession planning can be especially complicated because of the relationships and emotions involved. The decisions you make now will affect the future of your business, customers, employees and, most importantly, you and your family. Therefore, it is often wise to solidify a business succession plan sooner rather than later.
Even if your retirement is still a good many years away, we encourage you to explore how we can help you turn your biggest challenge, into your biggest opportunity, and create a legacy of success.
We would like to help you achieve your Watershed moment, and welcome your call to set up an initial discussion.
Please call Caroline Wilson on 01604 660 511 or email