Survey reveals generational differences
Succession planning remains top of mind for family businesses
First Bank Center for Family-Owned Businesses recently partnered with MacKenzie Corp. for a survey aptly called “The 2023 Family Business Survey.” The research surveyed 552 family business owners/members across first- to fifth- generation companies.
“Family-owned businesses have the challenges of their industry, of course, but also the added complexities of succeeding their parents or grandparents and working side by side with their siblings,” said Shelley Seifert, First Bank chairman and CEO. “The 2023 Family Business Survey highlights the unique attributes of family businesses, their cultures and how generations of ownership approach their businesses differently.”
Among the survey findings:
- There are generational differences in motivations for starting and running family-owned businesses. While first-generation respondents identified self-sufficiency and passion as their top motivators for starting the business, subsequent generations chose family support and entrepreneurship as their main motivators.
- 42% of subsequent respondents started working for their family’s business to continue the family legacy, 22% were asked to join the family business, 15% needed a job, 11% needed to fill the role and 10% said it was always the plan.
- Out of the 73% of family businesses that have (or are planning to create) a structured succession plan, there’s a 50/50 split between seeking outside support and keeping the process internal.
- 37% of succession planning efforts were slowed or paused because of the pandemic.
- Subsequent-generation business owners and family members say they are more likely to pass ownership to a future generation in the next 10 years (49%), whereas their first-generation counterparts say they are less likely to pass ownership in the next 10 years (27%).
- Subsequent generations see their business strategies changing in more ways than first generations over the next year, with notable differences being corporate social responsibility (9 percentage points higher) and research & development investments (9 percentage points higher).
Full survey findings are available upon request or can be accessed on the First Bank Center for Family-Owned Businesses website.