Why Family Businesses Need CPAs

Source: Laird Norton Tyee Family Business Survey

This article is based on a study by Laird Norton Tyee and Oregon State University. The study shows family businesses in vital need of strategic planning, development of management structures, and succession planning.

Less than 30 percent the family businesses in the study have written succession plans. This is a major contributor to the failure of family businesses. Forty-six percent have identified future roles for family heirs, and 41 percent have chosen successors. Ninety percent expect their next CEO to be a family member. But twenty-five percent believe the younger generation isn’t capable of leading the company.

A large percentage, nearly 64 percent, have no experience standards for family members that join the businesses.

A succession plan could help identify ways in which the younger generation can find the right career path (and get the right experience) to best help the company succeed in the future.

The absence of disciplined planning can have severe effects on family businesses. CPAs are in an excellent position to help.

(Editor’s note: Sharing this study with family business clients might prove valuable for them.)

For the complete article, click here.

From Laird Noton Tyee http://familybusinesssurvey.com/survey/survey.htm