67% are at Risk of Succession Failure
If you are an owner in a family enterprise, the chances of your business transitioning successfully to the next generations is not very good. This has not changed over the years. Statistics show a failure rate of:
- 67% of businesses fail to succeed into the second generation
- 90% fail by the third generation
With 80% to 90% of all enterprises in North America being family owned, it is important to address the reasons why transition is difficult. Read more
The contract is signed. The cheque is cashed. Your business has been sold or you’ve been given a golden handshake. Now what?
It’s a question many former company owners have a tough time answering. Whether you’re looking to sail around the world, start a new enterprise, or spend time with your family, you must now figure out what to do with your money—and with your life.
Here are 13 things business owners should do after leaving.
Shifting gears in a rush increases the likelihood of missteps, financial and otherwise. Take some time to reflect on what’s happened, and what’s to come. You don’t need to accomplish everything at once.
- Define your goals
Do you want to spend time with family? Travel? Get involved in a charity or a community cause? Start a new business? Write it down.
When dealing with the estate planning of a family business it is particularly important to consider the issue of estate equalization. One of the common objectives in a family business succession plan is to treat the children fairly and/or equally. This can be problematic in that many family business owners see up to 80% or more of their wealth tied up in the family business. The question arises, how to deal with the children who are not involved in the business when those children that are will receive the family company shares as their inheritance? Aside from the issue of maintaining family harmony another risk of not dealing with this issue in an effective manner is the risk of court action under provincial legislation such as the Wills Variation Act. Read more