Succession Planning: Passing the Torch

Passing on the family business for successive generations has been part of the entrepreneurial dream. Ford and Wal-Mart are the big names in a multi-generational businesses. But even for the small family shop, passing the business to the children is a source of pride and means to ensure the business goes on. However, business succession is no simple family matter.

According to the Small Business Administration, 90% of U.S. businesses are family owned, but only 30% succeed in the second generation. Just 15% make it to the third generation. That is because most business owners fail to plan seriously for their own succession. Smooth succession planning is something that takes time, and the hand off needs to be carefully planned and executed if it is to be successful.