One of the fundamental skills that those seeking to make their mark as
entrepreneurs must master is forecasting. Financial plans, marketing schemes,
production schedules—nearly every task crucial to the success of a modern
enterprise—is in some way founded on the ability to peer into the future and
base sound decisions on what one sees and anticipates.  Many readers of Worth
are among those who have elevated this aptitude to an art form. Add to
prescience an inspired idea for a new product, a flair for organization, and an
ability to motivate employees, and, with luck and hard work, a healthy and
dynamic family business results. While this alchemy is rare, it can have a
dramatic impact on the world: Family businesses produce over half the U.S. gross
domestic product, and provide 60 percent of all the nation’s jobs.
Yet,
though proven farsighted in business, astonishingly few of the nation’s
successful entrepreneurs apply their forecasting skills to the crucial question
of succession. According to a survey of 1,143 family businesses (mostly formed
after World War II) conducted last year by MassMutual Financial and the Raymond Family Business Institute, nearly two in five of these companies
will see their founders retire in the next four years. A startling 42 percent of
those enterprises have not named a successor. Loaded Dice
Successful entrepreneurs are, by their nature, risk takers,
but this failure to plan represents a blind gamble with their life’s work—and
one with no upside potential. Change in control upon the death or retirement of
a founder can, literally, imperil an otherwise healthy business. Indeed,
according to family business consultants, few survive it. These pundits
estimate that between two-thirds and three-quarters of all family enterprises
fail sometime between the first and third generations.
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