TITLE

Lessons, Legends and Legacies: Serving the Family Business

AUTHOR(S)
Eddy, Peg
PUB. DATE
December 1996
SOURCE
Journal of Financial Planning;Dec1996, Vol. 9 Issue 6, p76
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
There are some rather dismal survival statistics of most family-owned enterprises. Family business experts state that less than 50 percent of all family-owned enterprises are successfully passed to the second generation; of those, only 15 percent reach the third generation. Add the fact that this decade will witness the greatest transfer of wealth in the United States' history, of which $2 trillion is concentrated in family businesses, and one can see that Family business owners need the help of proactive financial advisors to develop and implement appropriate management and ownership succession strategies. In addition, the compensation structure for family members may be our of line with industry norms, and frequently there is no formal means of performance evaluation or compensation planning. Items such as a shareholders' agreement, funded buy/sell arrangements, formal job descriptions, entry mechanisms for family members to become employed in the family firm, exit mechanisms or disaster contingency management plans are frequently lacking in the family business.
ACCESSION #
5560325

 

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