Published in California Trusts and Estates Quarterly , published by the Estate Planning, Trust and Probate Section , Vol. 4, No. 3, Fall 1998. Family businesses are unique because, in addition to the usual technical business and estate planning issues, the business is interrelated to a multitude of family factors. If a family business is to achieve its full potential, it is vital that its management understands that business families function quite differently from non-business families and the challenges they create. As well as making the right decisions on the commercial problems which beset all enterprises, family businesses have to be able to analyze the special dynamics that surround the founder, the family, the firm and the future. Most professionals and family business owners minimize or even dismiss the family factors in the family business succession planning process.
Many entrepreneurs resist succession planning as a troublesome admission of mortality.
Statistics confirm that most family businesses, for whatever reason, do not properly plan succession. Less than one-third survive into the second generation. The dying family business so permeates our business culture that is has become legendary. All these phrases suggest the same story. Ironically, there is an abundance of professionals with the technical skills necessary to plan the succession process.