The “what’s next” stage in the family business owner’s life is challenging in that decisions have to be made in terms of succession to family members or selling the business and retiring. Yogi Berra would say that when you arrive at this fork in the road, “take it.”
The challenge for the decision maker facing this fork in the road is when the interests of the owner and family are not aligned. Under those circumstances, further challenges within the family structure may occur. Questions such as, “do I sell to an unrelated third party?” or “do the children have the capacity to sustain and grow the business?” are not easy, and the status quo is rarely the answer. Hence, the family business owner must confront the inevitable question – “what’s next?”
Although research by the Family Business Institute reports that 88% of current family business owners believe their family or families will control their business in five years, succession statistics undermine that belief. According to the Institute, only about 30% of family businesses survive into the second generation, 12% into the third generation and 3% into the fourth generation or beyond.
Considering that it is an accepted fact that 95% of the businesses in the U.S. are family owned and in many cases survive into two or more generations, PLDO Managing Partner Gary R. Pannone’s advisory, Planning for the Next Step in the Family Business, is a helpful resource guide as to why having a well-thought-out plan is vitally important to family members and the future of the business. For more information on business succession planning or other business matters, contact Attorney Pannone at 401-824-5100 or email [email protected]. We welcome your comments, questions and suggestions.