FINISH WELL.
You haven’t spent an entire career nurturing your company and its reputation only to see it fail to outlive you. Yet more than seven out of ten closely held businesses do just that when the founder leaves. Even multigenerational family-owned companies often end up ruining the family, the business, or both when it comes time to transition.
“Statistics show that approximately 75 percent of all businesses fail to survive past the first generation of owners. More than 85 percent fail by the third generation, and over 95 percent fail beyond that.”
Source: YPO
WHY?
In many cases, it’s a lack of anticipation. In others, it’s a lack of preparation. And very often, it’s unrealistic expectations.
Both parties to a succession plan – whether an internal transaction or an external sale – want it to be a win-win proposition. But when you’re sitting across the table from someone with whom you’ve long worked side-by-side, the dynamics change. The stakes get higher. Unfamiliar suspicions can arise. When disagreements occur it’s easy to lob accusations, but in our experience they’re almost always based on differing perceptions, assumptions, or expectations. Which means the reason most succession plans fail is a lack of understanding about what’s really going on.
