How will the legacy of your family business hold up?

Family businesses come in all shapes and sizes, from the corner store to Walmart; widget maker to Ford Motor Company.  Did I mention Walmart and Ford in the same sentence as family business?  Yes, Ford and Walmart are two of the 150+ family controlled companies in the S&P 500!

Among the resources available from The Family Business Institute (a professional service firm dedicated to serving the needs of family and closely-held businesses) is an interesting article on the topic.  As a private investor focused on partnering with privately held, lower-middle market businesses for long-term (think decades not years), there were several interesting points in the Family Business Institute’s article 10 Things You May Not Know About Family Businesses.  Not surprisingly, family businesses are enterprising and tend to be successful . . . but their life span is not indefinite (24 years on average – see #6 in the article).

Why only 24 years?  Reasons vary for sure, but one of them has to do with transitioning a business beyond the leadership of its founder.  There are many effective solutions to this challenge, and at least one sure fire way to fail and that is to fail to consider the issue.

Are you considering what the future holds for the legacy of your family business?  Beginning to think about liquidity?  Do these thoughts resonate with you?  If so, give us a call.  We would love to talk.