There is a good article on the importance of succession planning in family business at KraftCPA’s on-line newsletter:
Succession planning is important in any business, but it’s sometimes overlooked in family-owned operations. This is a big mistake. There are numerous former family-run companies that no longer exist due to poor or no succession plan.
The plan needs to be well thought out and discussed with everyone affected. Don’t just assume that a son or daughter will want to carry on the family business. Even if your children say they will take over, they may not have the true desire required to continue a successful operation.
We see a lot of these issues in students who are considering, and being considered for, taking over family businesses. There is often a communication breakdown, with lots of unrealistic or inaccurate assumptions by parents and children. This type of planning requires long-term, open, honest conversations about what the future will hold for all involved.
You can find the full article here.