It may seem oversimplified, but communication really is paramount to successful succession planning, and it needs to begin when the founders are still in control. This paves the way for properly communicating the founders’s wishes and plans, and will also give heirs the opportunity to weigh in, express their views, concerns or excitement about the business.
Also, an impartial, non-family third party can assist in finding solutions for your clients’ families. For instance, they can address a situation where one heir genuinely cares about the business, while the other(s) may not.
Therefore, being a part of a family-owned business with both family and non-family in partnership positions can create a strong dynamic.
Privately owned family businesses account for 64 percent of the U.S. GDP, yet only approximately 40 percent of them have a clear succession plan in place. Unfortunately, a large portion of those plans will result in unsuccessful transitions.
Why are we facing such daunting statistics? Answer is every family wants to create a legacy for their children in the future but often are not taking the critical steps of addressing it in the present.