ADDRESSING TRANSITION UNCERTAINTY

With an eye to the future, most business owners recognize the value of having a succession plan in place, and 70% of our survey respondents indicated that they already have some form of succession plan in place.

However, half of the business owners who have a plan are nonetheless worried about the ability of their chosen successor(s) to maintain and grow the business over the long term.

RESPONDENTS ARE CONCERNED OR VERY CONCERNED ABOUT THE FOLLOWING ASPECTS OF TRANSITION

Successor being adequately prepared to run the business

Transition resulting in family conflict

Their values for the business being carried forward

Transition resulting in management team conflict

Transition resulting in conflict among owners

Business succession planning is a complex and interconnected process with unique considerations specific to each business. There are, however, several best practices business owners can adopt to increase the odds of a successful transition.

Most family businesses do not survive to the third generation. A well-designed succession plan can help your business avoid this fate. We advise business owners to apply these four best practices to support a smooth transition:

Create a strategic plan that examines the current state of the business and where it is headed over the next five-to-10 years.

Address the future transfer of business ownership to the next generation.

Transition leadership responsibility to the next generation.

Use an advisory board or formal board of directors to support current management and the succession process.

A well-orchestrated succession plan supports both the continuity of your family business as well as harmonious family relationships. Successful leadership transitions take longer than many business owners anticipate, therefore it is never too early to start laying the foundation.