Family firms failing to plan for succession

Two-thirds of family business owners are retiring with no successor and no estate plan in place, new research by BDO Simpson Xavier has found.

Irish family businesses, a driving force in the economy, are neglecting the most crucial aspect of their business, namely handing over the reins to a successor, BDO says.

A survey of 1,000 firms carried out by BDO found 61 per cent of family business owners had not planned for succession, although 70 per cent wanted control of the firm to stay in the family.

"International research tells us that succession planning is crucial for family businesses. However, this can be a highly emotive issue," Jason Sheehy of BDO said, noting that 61 per cent of respondents had no process in place for dealing with conflict in the business.

BDO also noted that while many owners would like the business to stay within the family, they realised the next generation might not yet have the leadership skills needed to make a success of the business and outsiders might have to be brought in.