Family-owned businesses are the single biggest job creator of the U.S. economy, employing 60% of the workforce, and are responsible for 78% of all new jobs created in the country. Why, then, do only 15% of family-owned businesses have anything resembling a succession plan in place?
The shocking statistic comes from a family business survey given by the National Bureau of Economic Research’s Family Business Alliance, which also found businesses have a difficult time surviving through multiple generations. Only 30% of family businesses make it to the second generation, and just 12% make it through the third.
Any family business will reach a day when ownership must change hands. CPAs can leverage their positions as trusted advisors to assist their clients with establishing a succession plan.