While the same is true if you own a family business, if you don't plan ahead, there is a good chance you might not to leave it behind either at least to the person or persons of your choosing. Family owned businesses are the backbone of the U.S. economy. A survey I conducted of 130 midwestern firms suggests that 80 to 90 percent of all firms are family owned. More impressively, family firms are estimated to contribute between 50 and 60 percent of the GDP, employ over 35 million people, and comprise nearly one-third of the Fortune 500.
Research suggests that only about three out of ten family firms survive into the next generation.
On average, the life expectancy has been estimated to be about 24 years or about the average tenure of the founders. Actually, this shouldn't come as too much of a shock. Only about 20 percent had either a formal written management or ownership succession plan. Interestingly, while nearly 80 percent of family business owners intend to pass the business on to their children, these intentions are rarely supported by a formal plan. First, talk about it.