Who’s Going to Take Over the Family Business?

There are an estimated 5.5 million family owned businesses in the U.S., and about 40% of those businesses get passed on to the second generation of family members. But, that percentage drops significantly when it comes to the business staying within the family beyond that – only 13% and 3% of family owned businesses pass on to the third and fourth generations, respectively. About half of the owners of a family business (48%) would like for a family member to eventually take over, and when the business has 20 or more employees, that percentage increases to 62.5%. However, the reality is that only 36% think it is likely (23%) or very likely (13%) that a family member will actually take over. Only 7%* of operating businesses were inherited. The average life span of a family owned business is 24 years.