Chapter 6

Succession

The ability to carry on a successful intergenerational transfer of ownership and leadership (succession) is by far the single most important family business issue. It is also the most researched topic in the area of family business. Most family businesses do not have a successful transition of ownership from the founding generation to the second generation. Studies have generally agreed that approximately 30% of businesses transfer to the second generation, while only 10%–­15% successfully transfer from the second generation to the third generation.1 Only 4% manage to stay in the same family in the fourth generation.2

The majority of family firms want to keep the business in the family and pass it on to the next generation. ...

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