Ask the CFO: April 1

Succession Planning: What Every Family Business Needs to Know
Insights from the April Ask the CFO with Lowell Mora

Our most recent Ask the CFO session focused on a topic that affects nearly every family-owned business at some point: succession planning. And based on the engagement and great questions we received, it’s clear that this issue is top of mind for many business owners.

We kicked off the session with a sobering truth: only 1 in 3 family businesses make it to the second generation, and just 1 in 8 survive to the third. These numbers aren't about lack of passion or effort—they reflect what happens when business transitions aren’t actively planned.

Throughout the session, I shared what I’ve learned after 30+ years as a CFO working with family-owned companies:

The Most Common Challenges I See

• Lack of early conversations: Many business owners put off talking to their families about future plans, but silence can lead to confusion—and even conflict—down the road.

• No clear ownership structure: It’s critical to clarify who owns what and how decisions will be made in the future.

• Overreliance on a single leader: Without a contingency plan or key person insurance, a business can falter when something unexpected happens.

We also discussed the importance of defining both personal and business goals early. It’s not just about the business continuing—it’s about making sure it continues in a way that aligns with the founder’s values, vision, and legacy.

What You Can Do Now

If you’re a family business owner, here are three steps to take today:

• Start the conversation with your family—especially the next generation.

• Review your ownership structure and succession documentation.

• Think long term: Do you want to keep the business in the family? Sell it? Groom a non-family leadership team?

And remember: succession doesn’t happen overnight. It’s a process that takes years of planning, honest dialogue, and sometimes a shift in mindset.

We also explored topics like:

• How younger generations can build credibility by gaining outside experience.

• Business valuation trends in a shifting economic landscape.

• What to know about earnouts and sale structuring in today’s market.

This was a truly rich and practical session, and I’m grateful to everyone who joined. If you missed it, I’d love to see you at the next one on April 18 at 10 AM CST. You can sign up and get reminders here: www.impactcfo.net/ask

Whether you’re planning an internal succession, considering a sale, or just trying to future-proof your business, I’m here to help make those conversations easier and more effective.

See you soon!