It is a known fact that fewer than 30% of successful family businesses make it to the third generation, and fewer than 15% make it through that generation. Growing complexity can complicate family relationships and become a barrier to the long-term sustainability of the business.

A plan that unites the family around a shared purpose – what the family business wants for the future of the business and for themselves as family members should be in place.

The family business plan should focus around the leadership for the next generation, clarity for the family and longevity for the business.

Many owners look at succession as an event – a day in the life of their business when they hand the reins to their children, nieces and nephews. Succession planning is one critical piece of a larger vision for continuity.

With continuity planning, the whole of the family and the business should be looked at. A comprehensive plan for the smooth transition of leadership, ownership, governance and family assets should be drawn up. Family members, management and shareholders should be confident a strong foundation is in place for future success that empowers the next generation and beyond.

Today’s generation may have trouble letting go, and the next generation may have trouble grasping the responsibilities of leadership and ownership. Growth and diversity in ownership can create tensions that keep family from aligning on important decisions. And the enterprise must keep adapting to the pressures of a fast-moving marketplace.

Successfully navigating the transition means answering complex questions.

Today’s generation may have trouble letting go, and the next generation may have trouble grasping the responsibilities of leadership and ownership. Growth and diversity in ownership can create tensions that keep family from aligning on important decisions. And the enterprise must keep adapting to the pressures of a fast-moving marketplace.

Successfully navigating the transition means answering complex questions but nevertheless these need to be done.

( All factual and statistical information presented in this blog has been obtained from an extract of an article from the Family Business Consulting Group, Chicago ) Follow us on our Facebook page and Family Business Office website at www.familybusiness.org.mt

At the Family Business Office we can offer you assistance in dealing with family business succession planning issues through incentives supporting advisory and mediation services. Contact us today on familybusinessact@gov.mt.