The Lack of Planning Stifles Small Business
The lack of planning stifles small business: only 30% reached the second generation.
Only 30 percent of family businesses fail to survive a second generation, largely because the problems that arise with the generational change in the direction of these businesses and lack of proper planning to ensure continuity.
This was explained to Efe Carlos Batlle, who advises those companies on the generational relay. Battles stressed the importance of family SMEs instruments incorporate into their plans to address the succession process, unless they want to join that 70 percent of businesses that do not exceed the first generation cycle.
According to Battles, building a healthy company with a strong family and calling for sustainable growth planned generation and transmission are the cornerstones which must settle the future of the family business.
The generational change at the top of companies can lead to the end of these, as reflected in the data, since only 15 percent root to its third generation.
Family protocol
Therefore, the development of a “family agreement” appears to be the best tool to ensure the survival and consolidation of companies, said Batlle, who said that owners of family SMEs should develop guidelines that may require “strict separation between business and family. “
According to this expert, “the document should be developed before problems arise, since it must be the framework that has defined objectives of the family and the company, the rules of interaction between the two and their commitment to comply.
He added that family SMEs as well as the difficulties with the relief they have to deal with the internal relations between family and business and “must be clear to all judicial and legal aspects, which are seen as vital to the process of succession.
One million family businesses
The country is home to a million and a half of family businesses, representing 65 percent of total employment and 80 private Battles explained.
In addition, these businesses generate 65 percent of national GDP and are generating 40 percent of national exports, “which shows the value they have for Spanish society.”
Given this reality, the initiative of the Chambers of Commerce, with financial support from the European Social Fund, many family businesses over the country participate in a series of courses in which they acquire the tools to ensure success in the transfer between generations.