When it comes to your accumulated life possessions, the title of 1930’s Pulitzer Prize-winning play by Moss Hart and George S. Kaufman captures the ultimate outcome of our physical assets – “You Can’t Take it With You.” While the same is true if you own a family business, if you don’t plan ahead, there is a good chance you might not to leave it behind either – at least to the person or persons of your choosing.
Family owned businesses are the backbone of the U.S. economy. A survey I conducted of 130 midwestern firms suggests that 80 to 90 percent of all firms are family owned. More impressively, family firms are estimated to contribute between 50 and 60 percent of the GDP, employ over 35 million people, and comprise nearly one-third of the Fortune 500.
Research suggests that only about three out of ten family firms survive into the next generation. On average, the life expectancy has been estimated to be about 24 years – or about the average tenure of the founders.