Statistics say that 30% of businesses pass from the first generation to the second, and only 13% make it to the third generation. The process of transitioning the family business is first and foremost about managing relationships and expectations among family members. Planning for business transition or succession is a subset of the broader planning process commonly referred to as “strategic planning.”
The strategic plan ultimately is intended to be a written summary of what the organization hopes to accomplish, and how it intends to accomplish those dreams. The business environment is fluid, and generational transfer (succession planning) is arguably one of the top challenges facing family businesses. Successful transition is not just about passing the business on; it is more often about change and change management as many of the historic processes, relationships, and structures are severely challenged and put to the test.