Why is Succession Planning Important for Family Businesses?
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Succession planning is a critical, yet often overlooked element of long-term business sustainability. Recent studies reveal the following:
Nearly two-thirds of family businesses don’t have a documented succession plan.
Only 30% survive into the second generation, 12% into the third, and just 3% make it to the fourth.
Around 70% of small businesses listed for sale never find a buyer, often leading to closure.
The cost of doing nothing is steep — not just financially, but emotionally and culturally. Without a clear plan, transitions can lead to:
- Internal family conflict
- Loss of legacy and community trust
- Business disruption or failure
Succession planning isn’t only about naming a successor. It’s about preserving the values, relationships, and stability that make family businesses unique. Whether through preparing the next generation, exploring employee ownership, or planning for a sale, there are options to ensure a smooth transition to the next generation.
Talk to your Federated Insurance® marketing representative to assist in connecting you with an independent and qualified estate planning attorney.
