A New Study Says Most Small Biz CEOs Lack Succession Plans
Feb. 1, 2005--A new study shows that the leaders of today's fastest growing small businesses don't plan on steering their company ships for the long haul.
The funny thing is that most of them haven't thought much about how to pass the reins to their successors.
In its survey of 364 CEOs of fast growing, privately-held companies called the "Trendsetter Barometer," PricewaterhouseCoopers found that 65% of the respondents said they planned to leave their company within 10 years. When asked about their exit plan, a majority of the respondents (51%) thought they would leave via a sale to another company. A measly 3% minority said they were counting on an IPO payoff. The survey's finding that CEOS have exit plans is hardly surprising: the fact that 43% of the respondents said they had done little or no succession planning is.
"Like many of us, these CEOs have a sense of their desired future, but they are overloaded with managing for today and are short of time fro developing comprehensive plans for tomorrow," said Mike Kennedy, leader of PricewaterhouseCooper's Personal Financial Services practice.
"Unfortunately, unless a key event occurs such as the company being sold, important corporate/shareholder documents like the buy/sell agreement are often not reviewed on a periodic basis," he adds.
Darren Dahl is a contributing editor at Inc. magazine, which he has written for since 2004. He also works as a collaborative writer and editor and has partnered with several high-profile authors. Dahl lives in Asheville, North Carolina.