Most family business owners believe their business will survive and support the family for generations to come. However, without very careful planning and forethought, that just isn’t probable. According to the Family Business Institute, only 30% of family businesses survive into the second generation, 12% into the third, and a scant 3% into the fourth.
Keep reinventing. Businesses are much more likely to make it through several generations of ownership when they continually find ways to reinvent themselves through new markets or new product lines.
Create a succession plan. While there is no one right way to do succession planning, the family businesses that pay careful attention to planning for the next generation of leadership are those that continue to thrive.
Have hiring standards. Hiring family members just because they are family is a recipe for disaster in family businesses. Companies that have rigorous standards for employing family members are better off in the long run than those that do not.
Bring in outside counsel. Having outside advisors available to the leadership brings important new perspectives to a family business, and can be used to strengthen areas where family managers may be lacking in expertise.
These tips are good for more than just a family business; they are good advice for any business that wants to keep going beyond the first generation of leadership.
To learn more about how to maintain business longevity through skillful business planning, call us today at (612) 206-3701 or fill out our contact form to schedule a small business consultation session.
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