How to Succeed in the Family Business

Steps to a successful business succession:

1. A willingness among the retiring generation to turn over responsibility and authority to the successors.

2. Well-groomed successors who possess most of the founders’ skills for running the business.

3. Accommodative heirs who agree to work together for the common good of the business.

4. A willingness among family employees to seek objective, professional help whenever needed.

5. A workable business plan that outlines goals for the company and responsibilities of the successors or heirs.

6. Early estate planning that recognizes the financial needs of each generation, with an eye toward reducing tax burdens.

Facts of Life

Some quick facts about family businesses based on a 1995 survey of 3,860 companies by Arthur Andersen:

* The median annual sales are $9.5 million; employees, 50; family owners, three; years in business, 43.

* About one-quarter are involved in manufacturing.

* About one-third of the owners are 61 or older.

* Forty percent of those planning to retire have no designated successor.

* About two-thirds expect the next transfer of ownership to be in family hands.