According to a 2009 study by The Family Firm Institute, fewer than one-third of family-owned small businesses make it to the second generation, approximately 15% to the third, and just 3% to the fourth and beyond.
Why Succession Planning is Often Delayed
It can be hard to focus on succession planning when the day-to-day tasks associated with running a small enterprise are so demanding. This is especially the case in periods of economic uncertainty. Because of this, many companies don’t start planning for succession when they’re supposed to–ideally five to 10 years before a projected transition, such as when the current owner will reach retirement age.
The Importance of a Comprehensive Succession Plan
However, it’s important to have a financial plan in place to prepare the business for the next phase. This could involve a sale, a dissolution, or a transition to a family member or business partner.
How a Community Bank Can Help
Representatives at a community bank can help entrepreneurs navigate the tricky issue of succession and put a comprehensive plan in place that allows their companies to be well-prepared for leadership changes.
Start Planning Today With First United Bank & Trust
The sooner you start planning for what happens to your business, the more choices you’ll have, and the easier it will be to stay in control of what happens next. Whether planning to keep running your business for a while or considering passing it on soon, it’s always a good time to start. Talk to a financial expert at First United Bank & Trust to learn how we can help you make a plan that keeps your business strong for many years.