A Profile of Succession Planning Among Family Business Owners

Abstract

Using data from the 1997 National Family Business Survey, this study analyzed 673 family-owned businesses. Consistent with other studies, the findings indicated that only 20 percent had a written succession plan. Among 673 family business owners, only about 14% developed a net worth statement and 13% met with a financial planner or business consultant to discuss estate planning. Those family business owners with a succession plan tended to be older, worked longer hours in their family businesses, had fewer numbers of children, and had higher business management scores than did those business owners without a succession plan. Those who started their own business were less likely to have a written succession plan than those who inherited the business. Female family business owners were less likely to have a succession plan than were male business owners. Based on the findings, implications for financial counselors/planners and family business consultants are presented.

Keywords: Succession, Estate planning, Family-owned business