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THE BOTTOM LINE

The success rate of family businesses surviving to the third generation is estimated
to be in the range of 13-16%46! That means that of 100 family businesses that
start successfully, 84 to 87 will be gone by the third generation. Although we
are lacking precise data, the success rate of family businesses until the fourth
generation is undoubtedly worse.

Maintaining family business success for more than one generation is clearly a
difficult task. Nevertheless, many companies have achieved this, including Simon
Property Group (a NYSE-listed shopping mall developer and operator), Westfield (an
Australian and U.S. shopping mall developer and operator), GOJO™ (developer and
manufacturer of Purell™), and Heineken (the Dutch beer brewer). In addition to
these large and relatively well known companies, there are others just as successful
albeit smaller and lesser known. One classic example is Bell Carter Foods, a client
for ours for more than 19 years. Bell Carter recently completed the transition to
the fourth generation of family leadership. We have detailed this example in our
book, Building Family Business Champions.47

Developing a family business strategic plan can be a very valuable tool to increase
the likelihood of a successful family business generational transition and decrease
the likelihood of family conflict and business failure.

So in order to avoid the dysfunctional chaos of a situation like the Buss
family, a family must develop a family business strategic plan. I have
recently completed a set of videos for LinkedIn titled “Creating a Family Business
Plan.48” These videos will provide a step by step method to help anyone interested
in developing a family business plan do so. They also discuss the classic core set of
issues that typically must be resolved by every family and include a sample family
business plan. A link to the course is provided here - Creating a Family
Business Plan

46 See Eric Flamholtz and Yvonne Randle, Building Family Business Champions, Stanford University
press, 2016

47 Ibid.
48 https://www.linkedin.com/learning/creating-a-family-business-plan

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