Family Business SuccessionHelping to keep family business healthy and create a lasting legacy
Family Business Physical Exam
Family businesses are very important for the American economy. They create 60% of this country’s GNP and employ 60% of our workforce. 40% of the Fortune 500 companies are family owned or controlled. As impressive as these numbers are, the health of America’s family businesses is at risk. Most are need of a full physical, MRI or even some surgery!
Let’s look at some numbers to back up this “poor health” claim. Less than 1/3 of all family businesses will survive into the 2nd generation, and only 1/3 will make it to the 3rd generation. This is like telling a smoker that his life expectancy is being cut short by 15 years due to a bad habit.
So what is the root cause for this bad health report that family businesses are facing? Simply put, it is a lack of planning, discipline and communication that is cutting short the life and legacy of family owned businesses. It is easy to make a New Year’s resolution, e.g. to loose 30 pounds in 12 months. But, you will never accomplish this goal without a plan, discipline and an accountability partner (often called a trainer).
When we talk about the lack of planning, you should know that 50% of today’s family owned businesses have no qualified, committed successor to take over the reins of the company. And in only 25% of family businesses has a family member been identified to lead the business and continue the legacy.
Poor communication, both verbal and written, can lead to bitterness, envy and strife and the break up of families with an end to the business. More than 1/3 of family businesses admit to conflicts of future business and family strategies. And a good 25% of family businesses quarrel about the competence of family members in the business or who should be allowed to work for the company.
You and your family have worked too hard, invested too much and sacrificed too often – and built a successful business – to allow poor planning, infighting or lack of communication to take everything away.
At Lohoff-Gaida Consulting, our goal is to help your family’s legacy continue into the 2nd, 3rd, 4th generation and beyond. And just as a good medical doctor is always available for you, year in, year out, our desire is to establish a long lasting relationship in which we fully understand your business and family and help both achieve their goals and fulfill their dreams.