You’ve spent 30 years building up your family’s bakery business, created both an outstanding product line and a strong and loyal customer base. Building upon your father’s original three shops and small wholesale business, you’ve acquired contracts with several large supermarket chains and are now mass-producing your baked goods for a national market.

You’re looking forward to retiring soon, but are concerned over the future of your company, wondering who among the next generation of family members will take up where you left off. And you’re not alone.

According to a recent study from accounting firm Kreischer Miller, many family–owned small businesses suffer from a similar problem: inadequate succession planning.

In their survey of more than 3,000 family-owned businesses, almost all claimed they wanted to keep ownership and management within the family, however only half have put a formal plan in place to facilitate and prepare family members for the transition. Not adequately grooming and training future executives and managers can lead to the downfall of the most successful business, and family owned businesses, in particular, lose steam and profits when an ill-prepared second or third generation takes over.

It also helps, they say, to have both family and non-family members on your board of directors. Kreischer Miller’s study found that only one-third of small businesses surveyed had non-family members on their board of directors. Having non-family on the board typically helps ensure that the best family members are chosen and prevents personal family dynamics from clouding proactive business decisions.

By developing a plan today, you can keep it “in the family” and ensure the future of your business.

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