Let’s take a moment to talk about a blunt truth that all family business owners have to face at some point: Most of these businesses do not have long term success.
You can find counter-examples. For instance, the Amway multi-level marketing company was started by Richard DeVos and now makes billions of dollars per year for his children. Sam Walton started Walmart in the 1960s, and it is still one of the biggest stores in the United States. On the whole, though, these types of success stories are the exception.
The overall statistics
When looking at the overall statistics and not just the exceptions, you’ll find that only about three out of every 10 family businesses make it from the founder to their heirs. The other 70% all have to close.
Sometimes, that closure is anticipated and a plan is in place. For instance, a parent who started a company may sell it and leave the children the money made in the sale, putting their financial future ahead of keeping the company going. In many cases, though, the children just aren’t interested, don’t know how to run the business or wind up making critical mistakes. If the percentage of second-generation businesses is low, the percentage of third-generation businesses is even smaller.
Making the right plan for your family’s business
If you’re thinking about passing your business on and you want it to succeed, you need to have the right succession plan. We can help you consider your options, avoid mistakes and get everything in place to give your children the best possible chance of success in the future.