The following statistics from the Los Angeles Business Journal (Oct. 29, 2001) help illustrate the importance of succession planning for family-owned businesses:
–Over 80% of all North America businesses are family-owned or controlled. Nearly 35% of the Fortune 500 companies are family firms.
–Family businesses account for 78% of all new job creation and 60% of the nations employment.
–Succession planning is critical as the post-World War II entrepreneurs are now reaching the age when they must decide on how to pass on the wealth built in their family businesses.
–In the next 5 years, 39% of family-owned firms will experience a change in leadership due to retirement.
Reproduced from National Underwriter Life & Health/Financial Services Edition, February 11, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.