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Continuity and succession planning are critical to achieving a long-term legacy and include things like defining when family members can work in the business, how profits are distributed, who serves on the board, and how to plan for next generation leadership.
If a key family member passes away unexpectedly or wants out of the business, the enterprise needs to remain stable as it goes through the transition. A strategic, well thought-out plan can help provide stability as the family business deals with the stress of change. PwC can work with you on continuity and succession planning to help ensure your family’s desired legacy.
Bringing up continuity and succession planning in the family can cause tensions to rise and some families avoid it just to keep the peace. In PwC’s 2019 US Family Business Survey, while 58% have succession plans, most of them are informal.
Continuity is critical because it supports the legacy of both the family and the business. It also has an impact on employees and community and is an important facet of supporting growth and longevity.
Not having a plan in place can put the family business, and family relationships, at risk.
Family enterprises often have family members serving as owners of the business as well as managers. It is common for a family business to evolve from the founder making all business decisions independently, to bringing in more family members and establishing more structure as the business grows and becomes more successful.
PwC recognizes that family businesses struggle with a variety of challenges, including defining when family members can work in the business, determining how profits are distributed or reinvested and deciding who serves on the board.
Continuity planning involves creating a strategic plan that addresses these challenges, along with how ownership is transferred across generations. Families can reduce tension by defining such plans before the challenges have become acute.
PwC’s Family Enterprises will work with your family to set up near and long term plans to ensure your family’s legacy. Our family business professionals can help you with: