Things to Consider When Planning Your Family Business Succession
This article explains why family businesses continue to generate 70-90% of global GDP annually. Ernst and Young reported that “the largest 500 family businesses constitute the third-largest economic contribution in the world by revenue and employ 24.1 million people worldwide.” Family businesses will thrive if they continue to follow four categories: the nature of change, talent in transition, the advisor advantage, and the not-so-secret family recipe for success. In the ‚Äúnature of change‚Äù category, digitalization, changing priorities, and passing the torch play key roles in family business success. Digitalization has become extremely important since the Covid-19 pandemic arose. Within the ‚Äútalent in transition‚Äù category some key concepts include professionalization, strengthening governance, succession, and bringing outsiders in. Some concepts to look for in ‚Äúthe advisor advantage‚Äù category are confidentiality, objectivity, attracting talent, understanding the family and the business, and diversity. The ‚Äúnot-so-secret family recipe for success‚Äù includes the long view, family control, and values. Following these fifteen considerations can help a family business continue to be successful.
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