Too Few Small Businesses Are Implementing Succession Plans

By Joseph M. Donegan

Despite scheduled changes to estate and tax law in 2013, new data shows that not enough small businesses are enacting succession planning strategies and may be putting their companies in danger.

Small companies and family-owned businesses make up between 80 and 90 percent of companies in the United States, and employ 62 percent of the workforce. In addition, small companies fuel roughly 64 percent of the country’s gross domestic product. However, statistics from the Family Business Institute reveal only 30 percent of family businesses survive into the second generation, and only 12 percent are still viable by the third, as a result of failed succession planning.