It is noteworthy that 75% of family business owners indicate that they would seriously consider selling their business, if approached; with 46.2% reporting having been approached within the last five years.
In relation to policies regarding future ownership of their business, 22.8% (32% in 2003) state that it is to remain a family business, 32.8% indicate that continued family ownership has first preference (i.e., 55.6% favour continued family ownership of the business), 27.4% indicate that continued family ownership is NOT important to them, and 17% have no specific policy (i.e. 44.4% are NOT committed to family business continuity) (Table 15.1).
These attitudes, indicating the desirability of succession, are likely to affect the longevity of family firms, especially first generation firms, 49.4% of which are NOT committed to continued family ownership. As Table 15.1 clearly shows, first generation family firms are less committed to remaining family owned and managed than later generation firms.
Table 15.2 shows that approximately 53% of family business owners are actively planning for the future sale of their firms either now (19%) or later (34%).
These percentages translate into 61.5% of first, 37.1% of second, and 27.8% of third to fifth generation owners planning the future sale of their businesses. These overall proportions are consistent with 2003, with the exception that 19% indicate that they are planning to sell now (8.2% in 2003).
Table 15.2 also shows that only 7% of family business owners report having considered listing on the stock exchange (21%).
Findings from this and earlier Surveys (1997, 2003) indicate that first generation family businesses are less likely to become multigenerational firms, not so much because they have failed, but because of their stated policies, or lack of them, in relation to future ownership of the family business.
In this context it is worth noting that whilst succession is rightly perceived to be a critical survival issue for families in business, a number of authors (Drozdow, 1998; Kaye, 1998) warn against a tendency simply to equate family business success with succession.
These investigators suggest that success is measurable in terms of the opportunities that family businesses create for their members and beneficiaries, as well as what makes financial sense to them at the time critical decisions about the future of the business have to be made. Based on those principles both keeping and selling the family business are viable success options.
Reasons given by family business owners for planning to sell their businesses
Table 15.3 outlines the main reasons family business owners contemplate selling their business, compared with their non-family counterparts.
Previous business involvement of family and non-family business owners
About 63% (48% in 2003) of family business owners report having been involved in previous businesses with 30.6% (25.2%) having been involved in businesses that were sold, 14.9% (20%) that no longer operate, 7.7% (12.2%) in businesses that were split up, and 9.8% (7.8%) that were wound up.
These figures suggest that a considerable percentage of family business entrepreneurs can be classified as serial business owners who are not wedded to a single line of business, but exploit each business opportunity to the full, then sell and reposition their assets in another.
They can be said to be in the business of being in business, with key objectives of: growing the businesses and increasing its value before selling it to accumulate family wealth.