Statistics say that 30% of businesses pass from the first generation to the second, and only 13% make it to the third.
The process of transitioning the family business is first and foremost about managing relationships and expectations among family members.
Planning for business transition or succession is a subset of the broader planning process commonly referred to as “strategic planning.” The strategic plan ultimately is intended to be a written summary of what the organization hopes to accomplish, and how it intends to accomplish those dreams.
The business environment is fluid, and generational transfer (succession planning) is arguably one of the top challenges facing family businesses.
Succesful transition is not just about passing the business on; it is more often about change and change management as many of the historic processes, relationships, and structures are severely challenged and put to the test.
Commonwealth Roofing Company
Commonwealth Roofing Corp. has always provided a great product and maintained a stellar reputation in the construction industry, but the modest-sized, family-owned company had few solid business processes in place. Company leaders had been focused on roofing and not on building the business. Issues also had begun to arise surrounding internal communication and management that were causing discord between the two generations working alongside each other.
“Pallas was able to identify the key issues that kept us from being the best we could be. We worked with them for two years, putting processes in place to position us for our first generational transition. Pallas helped us dramatically evolve our business, growing revenue 350% in two years. We are now positioned for long-term success. The results took longer than we initially thought, but it was well worth the investment in our company’s future.” Mike Sasse, President