December 16, 2015

It’s estimated that between 80% and 90% of businesses in United States are controlled by or owned by families, and as many as one-third of them are Fortune 500 companies. This doesn’t mean however that all family owned businesses in America are big corporations. In fact the majority of them are small or mid-sized businesses. Family owned businesses also represent another important statistic in the United States, which is that they account for up to 78% of jobs created within the country.

One thing you need to know about owning a family business is that more than 30% of all family in businesses make it to the third and second generation, 12% make it to the third generation and 3% to the fourth and beyond.

This means that even though it was a given that you or your parents would have taken over the family business, you need to understand how future generations are less likely to take on these responsibilities. This presents questions related to whether you should consider selling or developing your business in such a way that it is capable to capitalize on the maximum sale cost down the road. You should evaluate all possible options before simply assuming that the children you have will take over the family business.

Consulting with a knowledgeable business succession attorney can help to answer many of the questions you have about the succession process and give you a better perspective on what you need to consider.