California Business Planning Attorney: Insights on How Family Businesses Can Endure

8:46 pm Business Planning

new business e1334954710230 California Business Planning Attorney: Insights on How Family Businesses Can EndureIf you have put a lot of sweat equity into building a business, it’s natural that you would want your business to endure beyond your years at the helm.  However, the Family Business Institute reports that just 30 percent of family-owned businesses survive past the second generation, and only 12 percent make it to a third generation.

A recent New York Times article examined several owners of family-run businesses to identify four primary traits that ensure longevity:

Willing to reinvent.  For family businesses that endure, the ability to reinvent themselves is one of the primary keys to successfully operating through the generations.  Whether it is expanding product lines or to new markets, the family businesses that continually find a way to reinvent themselves continue to prosper.

No employment promises.  Companies that base employment on skill rather than familial relationships also survive more readily than those that guarantee employment for family members.  Setting rigorous standards for family involvement is key.

Succession planning.  Strategic succession planning is another hallmark of long-lived family owned businesses.  Some family business CEOs choose their successor and some put it to a family vote; however they do it, successful family-owned companies make sure that best practices in succession planning are followed.

Outside counsel.  Family businesses that thrive for the long haul have either a board or a “kitchen cabinet” of outside advisers to help them with the big decisions.

Contact us today for individualized planning strategies to meet your unique needs.

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