A detailed Succession Plan affects all three areas (circles) of a family business and is therefore the focal point of the overlap area. While it serves to protect the ownership and wealth of the business, it also involves the financial plan of the individual owner(s).

Additionally, the strategies for management of a family business are reliant on an appropriate succession plan.

Once such a plan is in place, it becomes a great foundation for determining what else needs to be done, and what training or education will be required, to move the business along.

Family businesses in this country are coming into a new phase of their evolution. In a recent study on family businesses it is estimated that 75% of the leadership of family businesses in North America will transfer from one generation to the other within the next 10 years.

Small and family-owned businesses are an integral part of the North American economy.

However, a variety of studies have indicated that most are not as prepared for managing the future as they should be.

• 64% of the Gross Domestic Product is generated by family-owned businesses.
• Family-owned businesses employ over 60% of the workforce.
• Family-owned businesses create up to 85% of all new jobs each year.
• 46% of families surveyed feel that the business has a definite impact on their family identity.
• 87% expect that, in 5 years, the business will still be controlled by the family and 34% expect that leader to be female.
• Of those that do, only 30% successfully transition to the next generation.
• Only 10% successfully transition to the third generation.
• 39% of family businesses are expected to change leadership in the next 5 years; 75% in the next 10 years.
• 42% have not yet chosen a successor and the percentage rises to 55% for those over the age of 61.

This evidence highlights the importance of small and family-owned business while illustrating the future challenges and the need for planning that this sector will increasingly face in the coming years. Our SuccessCare® Program deals with the creation of a suitable succession plan, one that protects the family unit from the rules that automatically affect the estate when the owner dies intestate.

What Makes a Good Succession plan?

As entrepreneurs, our vision of "succession planning" is generally focused on wills, tax strategies, estate structures and financial planning tools. However, it is important to first identify your personal goals and then ensure that your succession plan, and the business itself, is structured around them. Find out more about creating an integrated succession plan.

For more information on how to set up your Succession Plan, contact Ed Rosenfeld at 212-579-2613 or e-mail ed@NowtoNext.com.