Chris Holman welcomes Jim Benedict, a managing director at PNC Private Bank and an expert on business succession and transitions.
Watch Jim and Chris discuss PNC Private Bank and expert insights on business succession, avoiding regrets, and wealth planning. in the YouTube video shared below:
In their conversation, Chris looked to find out several things from Jim;
Q. Jim, I understand that more than a quarter of all U.S. companies are family owned. Despite the huge impact family businesses make on the economy, a large percentage of them don’t survive after the first generation exits the business. Why is this?
Q. Obviously every family-owned business will eventually have to transition – either voluntarily or involuntarily – someday. What should business owners do to prepare for this eventuality?
Q. I’ve heard that upwards of three-quarters of business owners report that they regret selling their business 12 months after finalizing the sale. Why is this, and what can owners due to avoid this regret?
Q. What are some commonly overlooked considerations or maybe even pitfalls that business owners neglect to think through?
Most people are surprised to learn that more than 27% of U.S. companies are family owned. In fact, family-owned businesses contribute $5.9 trillion — or about 64% — to total U.S. GDP.
Despite being a major driver of the U.S. and local economies, it’s not uncommon for family businesses to cease operations after the first generation exits the business. And, unfortunately, about 50% of business transitions occur involuntarily due to what has been coined by the Exit Planning Institute as “the Five Ds:” Death, Disability, Divorce, Disagreement, and Distress.
One thing is certain — whether voluntarily or involuntarily — every family business will transition in some form or fashion someday. Yet nearly 80% of family business owners have no formal succession plan.
This interview is a conversation with Jim Benedict, a managing director at PNC Private Bank and an expert on business succession and transitions. Jim covers involuntary business transitions and outline the dos and don’ts of succession planning.
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