Only about 25 percent of family businesses survive for 15 years or more, and only about 25 percent of the “survivors” will survive the transition to the next generation. There are many contributing factors.
Most parents want to treat their children equally, but not all children are capable of running a business. And not all children want to continue in the family business, irrespective of their capabilities.
It is critical to take a sober look at your business and your descendants, and consider: Can my business be successful for another generation? Your business may have provided a brilliant solution to a pressing need back when you founded it, but markets, technology and spending patterns have changed since then. Unless your business is nimble enough to make adjustments, it may not continue to be viable.
Moreover, what is more important to you: the continuation of your business or passing on your wealth? These goals may go hand in hand, but if none of your children will carry on your dream, selling your business and passing on the proceeds may be your best option.
Your trusted advisors can help you leave the kind of legacy that best honors you, your business and your family.