The biggest threat to the survival of a family business might be a lack of long-term planning, new research shows.
Out of 800 family-run business owners surveyed nationwide, less than 30 percent said they had succession plans in place, while less than 40 percent said they had a successor lined up, according to Laird Norton Tyee, a Seattle, Wash.-based wealth management firm. Nearly half were running their business without a written strategic plan.
The problem, respondents said, is that finding someone from within the family to keep the business going isn't easy. As many as a quarter say they believe the next generation isn't competent enough to take over. Almost all the owners surveyed said they derive the majority of family income and security from their business.
"The most surprising outcome of the survey is that the needle is stuck on conventional wisdom," Rich Simmonds, managing principal at Laird Norton, said in a statement. Simmonds said the study aimed at achieving a deeper understanding of how family businesses operate in order to provide better resources to support them.