Giving Them the Business: Ensuring a Smooth Transition When It's Time

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Unfortunately, most business owners fail to plan for the continued operation of their business should they become incapacitated or die. Only 30% of family-run companies today succeed into the second generation, and only 15% percent survive into the third generation. More often than not, the failure to plan is psychological.

Contemplating one's mortality is generally not considered to be a favored activity. Moreover, some business owners identify so closely with their business that they simply cannot comprehend the idea of their business being operated by anyone other than themselves. Others believe they have plenty of time to plan. When a business owner becomes incapacitated or passes away without a plan in place, the business always falters and often fails.

A successful business succession plan includes a number of events that are carried out over time, as opposed to an emergency fix based on an unexpected crisis. The generally recommended time to plan for business succession is between the ages of 55 and 65.

Some succession consultants recommend a 3-5 year plan, while others advocate...

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by: Gina M. Barry, Esq.

Prime
May 2007

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