The process of passing a family business onto the second generation is so difficult that not even a third of them survive. Beyond that, roughly half make it to a third generation. In a normal day in the U.S., 40 percent of businesses are confronted with a change of owners. Those who have founded the companies are struggling to find solutions, but there aren't many options.
Here are some of your options:
- Sell off the company.
- End the business.
- Remain as the owner, but contract others to manage.
- Keep ownership and management within the family.
These are the most common causes for failure of the transition of the small business:
- There is no strategy.
- The business is missing energy.
- The owner lacks the motivation to change the business.
- The coming generations are not interested in working with the business.
It is crucial to have a planned strategy ahead of time. Speak with Bailey & Utley, CPAs about your business situation, and we'll help you with the proper preparation.
