Family businesses are unique and important
The greatest part of America’s wealth lies with family-owned businesses. They comprise 80% to 90% of all business enterprises in North America and create nearly 85% of all new jobs in the US.
Family businesses are thriving. More than 96 percent of respondents anticipate that their business will expand or at least remain the same size over the next year. Recent economic slowdowns, particularly in sub-prime lending, have not seemed to influence this key segment of the economy. The profound optimism of family business owners has them charging forward. (Family-to-Family: the Laird Norton Tyee Family Business Survey 2007)
Yet perception is not necessarily reality. Among family business owners who expect to retire in five years, fewer than half have selected a successor; of those expecting to retire in six to 11 years, less than a third have done so. Nearly a third has no estate plan beyond a will. (2007 American Family Business Survey)
Family businesses are challenged. Only 30% of all family-owned businesses survive into the second generation, twelve percent will still be viable into the third generation, and only 3% of all family businesses operating at the fourth-generation level and beyond.