Forbes contributor Russ Alan Prince examines the concern about succession planning among many businesses. Only about one-fourth of businesses have a succession plan in place, and many cite the reason for no formal plan being the fear of causing family conflicts, according to Prince.
Second-generation family businesses are more likely than first-generation businesses to have a formal plan in place.
“Often a defining characteristic of family businesses is the desire to ensure the business stays in the family across the generations. However, this – many times – is not the case often due to a lack of planning,” says Daniel Geltrude, Managing Partner of Geltrude & Company and Director of the firm’s Family Office Practice. “Even when quality succession plans are put in place, we find that it’s not usual for the family members to push them off. Basically, sometimes there’s a lack of follow through.”