As a family owned business, you might have anticipated that you had a clear track for what would happen after you exited the company, but as covid-19 and all of 2020 have shaken up what the future looks like you may be aware of issues around the process of business succession planning.
In the United States, nearly 90% of businesses are family controlled and they produce a significant amount of the country’s GDP. What is interesting in light of these facts about the critical nature of family owned businesses, that only one third of these companies will survive the second generation. A mere 3% will make it to the fourth generation and beyond.
Perceived immortality about a founder is one of the biggest setbacks when it comes to ensuring proper succession planning. Whether it’s not wanting to step down or a reluctance to trigger rivalries in future generations, it is important to think about how existing talent might be incorporated into the scope of your succession planning and whether or not outside talent needs to be used as well. The hesitance to transition control to the next generation could become especially problematic for an otherwise successful company.
If you want the company to have any future that doesn’t include you, succession planning is critical.
Whether you’ve become aware of these issues and might have locked down or simply know that you need to have a more structured business succession plan, the support of an outside and dedicated Pasadena business succession attorney can make a big difference in your understanding of these issues and in crafting a succession plan that is in line with your company.