Life cycle trends pose challenges to family business sustainability

Sustaining a family business over multiple generations has never been easy, and several megatrends are making it even harder.

First, there is the well-documented decline in corporate life expectancy generally. A recent study by Fidelity Investments found that in the last 20 years, the expected life of public companies has declined from 25 years on average to less than 12 years. Private companies have a much higher mortality rate. Corporate “death” occurs through business failure, M&A and other causes. The rising cost and the increased complexity of doing business as a result of globalization, technology and communication advances are among the reasons for the increasing mortality rate.

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