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Family Business Continuity:
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Family Business Continuity:
The experience accumulated on the subject of continuity shows that the problem can very definitely be coped with, if trouble is taken to devote the time and thought required for this - in good time.
Experience also shows that we are human. We plan the business, the financing, marketing and taxation. We examine and probe matters which we think have or can be expected to have an influence on the business which we have built up with so much toil, and all on the assumption that we will live for ever.
Problems of continuity currently constitute the number one factor in the liquidation of successful businesses in the U.S.A., and in Israel.
The damage to profitability and liquidity, which are mostly mentioned as the cause of the liquidation of businesses, constitutes in many cases only the symptom of the phenomenon which brought about the liquidation of many family companies, even in the first generation.
The statistics in the U.S.A., show that out of those companies which have survived the first five years, and have therefore proved that they have justified their existence economically, only 30% survived to the second generation, 15% to the third generation, and only 6% to the fourth generation.
In the past ten years many surveys have been conducted on the subject of continuity, and it appears that the problem of continuity has killed off more family businesses than any other single cause.
The problem of continuity has turned into the cancer of family businesses.
The majority of people have no experience of the problem of continuity. This is a subject that they deal with only once in their lives, or sometimes not even once. (In Israel this is a common occurrence, the senior generation prefers to distance itself from the problem of continuity and leaves the problem to the next generation.
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