Transmitting a family business is much more than simply passing on the baton. It's a crucial moment that can define the future of the business and the family. However, the process is often fraught with pitfalls. In her hard-hitting article Véronique Simonin, Head of Sales & Strategic Key Partner Management, Swiss Life Global Solutions highlights the challenges families face in this adventure and offers effective solutions for successfully navigating through the complexities of succession.
The challenges of succession
Less than a third of family businesses survive to the next generation, often due to disagreements over values and priorities. While 65% of founders dream of passing on their legacy, only 25% manage to do so. Estate planning needs to be much more than simply naming heirs; it needs to integrate flexibility, cash creation and fairness.
Open communication between generations is essential to avoid misunderstandings and create a shared vision of the company's future.
Innovative solutions
Solutions such as variable universal life insurance can play a crucial role in facilitating a fair distribution of assets. They offer the flexibility to adapt to the changing needs of family members, helping to secure wealth while preserving harmony and cohesion within the family.
Faced with increasingly pressing financial challenges - including debt and cash flow issues - preparation is becoming more essential than ever. By 2021, only 15% of companies had shareholder entry and exit plans in place, a worrying decline on previous years.
Guaranteeing the future of a family business requires rigorous estate planning. This is essential to preserve the legacy and ensure a smooth transition to the next generation. Investing in adequate preparation is crucial to the company's longevity.
Without proper planning, business owners jeopardize the future of their structure. A solution that can create liquidity would give them the extra security and freedom that both the shareholder family and the business need.
Véronique Simonin, Head of Sales & Strategic Key Partner Management
For in-depth analysis and relevant strategies on business succession, we invite you to read the full article by clicking here.
This post was translated from the original French.