Succession Planning

During this challenging economic period, most entrepreneurs and small business owners are focused on the stability and growth of their business.  Few are probably worried about which family member (if any) will eventually take over the business.

Your business, which has provided years of fulfillment and accomplishments, can also provide loads of emotional stress if you are seriously considering passing it along to a family member.

In an Inc.com article, six entrepreneurs provided a candid behind-the-scenes look into the trials and tribulations of family businesses.

A recent report showed the majority of family businesses are not handed down successfully.  PriceWaterhouseCoopers conducted a study of 1,600 family-run businesses and only 36 percent of the survey participants said their businesses survived a transition to the next generation.   And, the survival for family businesses drops even further when passed along to a third generation — with only 19 percent of businesses remaining afloat.   Lack of succession planning, poor communication, power struggles and lack of interest are among the major issues leading to succession failure.

Succession planning impacts businesses of all sizes and doesn’t always involve family members.   Case in point -the surprising resignation of David Sokol from Berkshire Hathaway has left many wondering who will eventually succeed Warren Buffett.

Running a business today is complicated and it’s very easy to get caught up in short-term goals.   Succession planning might seem like something you can think about tomorrow, not today.   However, advance planning and open communication with family members and staff could save a lot of grief down the road.