A family business crisis waiting to happen
One of the most important factors that affect family business transactions is the lack of a clear, well-defined business succession plan. The lack of such a plan may create a conflict between the potentially inconsistent goals of family unity and the continued financial success of the business.
Another very important factor is the failure to address the issue of who will run the business – the issue of “control”. In an intergenerational (2nd Generation) or multigenerational (3rd Generation) family of several siblings and cousins, this poses quite a challenge of choosing a successor and can cause sleepless nights for the patriarch and senior generation members.
Additionally one other neglected factor is the failure to ensure that the surviving spouse has a market for the business ownership that they have inherited and sufficient income that will reasonably last for their projected lifetime.
Without a well-defined Business Succession Plan the Family Business will Collapse!