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BY William Lowman Jr|June 26, 2013

Planning for Succession in your Business

Family businesses comprise approximately 90% of the businesses in the United States. Yet only about one in three survive to the next generation and one in ten to the third generation. Why? The closely-held family business often fails for the same reason that it originally succeeded. It relies on its uniqueness - the compassion and loyalty among the family members not present in other companies - to generate a dynamic viability to the company. Yet this uniqueness may also lead to distrust within the family and disruption of the family business as an ongoing entity. To prevent the demise of the business, the family should create and implement a strategic business succession plan. This plan should integrate business, tax and liquidity considerations with the emotional and financial needs of the family and the needs of the business to achieve continuity and growth for the future. The goals of a business succession plan for each family are unique to that family, but center around several core determinations. The family must decide: With a general consensus on these core determinations, the family can begin to create its strategic business succession plan. It is often in this planning process that the family will flesh out the answers to some of these questions.