Stages of succession planning and factors of transferring management and ownership for the family agribusiness

Although many family business owners want to maintain family control of the business for future generations, few businesses survive across generations. Neglecting to plan an entry and exit strategy for family members are just two factors that explains why more businesses don\u27t succeed in transferring the business to the next generation in the family. Ordered Probit models and Probit models were used to discover factors that influence the process of family business transfer of management and ownership. Data came from a survey of 736 businesses in four Midwest states. Four factors were found to be correlated with the transition of both management and ownership of the family business: (1) identification of a successor, (2) discussions of future goals, (3) knowledge of where to start the transfer process, and (4) perception of being prepared for a transfer. Family businesses that had these four factors were found to be further along in the succession process than businesses that did not have these factors. The presence of conflict and tension were found to hinder businesses from progressing in the transfer process