Most family businesses in Florida don’t last long enough for a third generation of relatives to take part. However, even if a family business does not last longer than one generation, it may be the source of funding for education or a well-financed future for many decades.
Nearly 33 percent of the S&P 500 companies are considered family businesses. Also, out of the 250 largest enterprises in Germany and France, 40 percent are family businesses. This indicates that family businesses that are operated efficiently can last and perform exceptionally. It is also not unusual for the growth rate for the family businesses that are made public to exceed that of comparable non-family enterprises.
An important factor in the success of a family business that lasts for multiple generations is social capital. Fellowship, goodwill and understanding among the people and families that comprise a social unit are the result of shared values and deep trust. This social capital can form the foundation of a very close family unit that is able to operate a family business. However, social capital has to be managed properly or the emotional intensity can lead to the blurring of the lines between the personal and the professional.
An attorney may assist the owners of a family business with planning and executing a carefully designed business succession strategy. Counsel could evaluate certain aspects of the company and advise clients about what legal mechanisms should be in place to ensure that ownership and management of the business remains in the family.