Planning a Successful Future for Your Family Business Enterprise

An effective business succession plan provides the framework for the future of your business—and your family

Business transition planning is a critical concern that family-business owners often put aside while tending to the day-to-day responsibilities and activities of managing their businesses. But it's an important issue that is most effectively addressed with early attention and action.

Succession planning is crucial for sustaining family enterprises for generations. An effective plan is far more than the selection of a successor. It also includes ongoing leadership development and communications to help avoid unnecessary conflicts and to meet the needs of both the business enterprise and family members.

The succession plan can assume that everything will go well, but it also must include contingencies for unexpected issues such as disability, disagreement, divorce or death.

Research commissioned by BB&T Wealth identified the greatest roadblocks to being prepared for a business succession event. Here are some key findings of that study, a random sampling of businesses valued between $1 million and $100 million and spanning a wide range of industries:

  • Level of succession preparedness – On a scale of 0 to 8, with 0 being totally unprepared and 8 being fully prepared, study participants received an average score of 3.13, indicating a moderately low level of succession preparedness.
  • Owner characteristics – The intent to transfer the business enterprise to family and the intent to manage wealth together as a family across generations were found to be important predictors of how prepared a business was for succession.
  • Enterprise characteristics – Business performance, retirement timing, family members' interest and organizational size are among the many factors influencing succession preparedness from the enterprise perspective.
  • Family influence – Family cultures have a high impact on family enterprises. Understanding the family culture and family members' views of the business help determine potential business transfer options.
  • Business formality – The level of formality of a family enterprise affects business longevity, business and family morale, and business value. It also impacts how attractive a business may be to a buyer. Examples of business formality include having a clear mission, key management development plan, job descriptions, set compensation plans, career paths, a regularly updated strategic plan, documentation of business processes, a fully functioning board, organizational chart and employee manual.
  • External environment – Businesses operating in larger metropolitan areas are more likely to be prepared for succession. This is due in part to their having greater access to professional services that can help them with succession planning and greater access to talent who can help them formalize the business. Applicable tax laws also may affect succession plans.

Related topics

Protecting Against the High Cost of Cyberfraud  (Article)

Given the relative newness of cyber liability coverage and the variability of policy features, it's essential to carefully analyze one's needs and scrutinize available options before paying the first premium.

Protecting the Future of Your Business  (Article)

While making sure their current strategies are on target and operations are in sync, business owners also should look beyond today to ensure that plans and processes are in place to protect the long-term best interests of their companies and their families.

Loans are subject to credit approval.

Only deposit products are FDIC insured.

BB&T Wealth is a division of Branch Banking & Trust Company, Member FDIC.

Investment and Insurance Products:
• Are not FDIC or any other government agency insured • Are not bank guaranteed • May lose value

Truist, BB&T®, Sterling Capital®, SunTrust®, SunTrust PortfolioView, Truist Securities®, SunTrust Premier Program®, AMC Pinnacle®, AMC Premier®, Access 3®, Signature Advantage Brokerage, Custom Choice Loan®, SunTrust SummitView®, and GFO Advisory Services® are service marks of Truist Financial Corporation. All rights reserved. All other trademarks are the property of their respective owners.

Services provided by the following affiliates of Truist Financial Corporation: Banking products and services, including loans and deposit accounts, are provided by SunTrust Bank and Branch Banking and Trust Company, both now Truist Bank, Member FDIC. Trust and investment management services are provided by SunTrust Bank and Branch Banking and Trust Company, both now Truist Bank, and SunTrust Delaware Trust Company. Securities, brokerage accounts and/or insurance (including annuities) are offered by Truist Investment Services, Inc. (d/b/a SunTrust Investment Services, Inc.) and P.J. Robb Variable Corp., which are SEC registered broker-dealers, members FINRA, SIPC, and a licensed insurance agency where applicable. Investment advisory services are offered by Truist Advisory Services, Inc. (d/b/a SunTrust Advisory Services, Inc.), GFO Advisory Services, LLC, Sterling Capital Management, LLC, and Precept Advisory Group, LLC, each SEC registered investment advisers. Sterling Capital Funds are advised by Sterling Capital Management, LLC. Mortgage products and services are offered through SunTrust Mortgage, a tradename for SunTrust Bank now Truist Bank. Life insurance products are offered through Truist Life Insurance Services, a division of Crump Life Insurance Services, Inc., AR license #100103477, a wholly owned subsidiary of Truist Insurance Holdings, Inc.

"Truist Advisors" may be officers and/or associated persons of the following affiliates of Truist Financial Corporation: SunTrust Bank now Truist Bank, our commercial bank, which provides banking, trust and asset management services; Truist Investment Services, Inc., a registered broker-dealer, which is a member of FINRA and SIPC, and a licensed insurance agency, and which provides securities, annuities and life insurance products; Truist Advisory Services, Inc., an SEC registered investment adviser which provides Investment Advisory services.

Comments regarding tax implications are informational only. Truist and its representatives do not provide tax or legal advice. You should consult your individual tax or legal professional before taking any action that may have tax or legal consequences.

Truist Wealth, International Wealth, Center for Family Legacy, Business Owner Specialty Group, Sports and Entertainment Group, and Legal and Medical Specialty Groups are marketing names used by affiliates of Truist Financial Corporation.

Truist Securities is the trade name for the corporate and investment banking services of Truist Financial Corporation and its subsidiaries, including Truist Securities, Inc., member FINRA and SIPC.

Branch Banking and Trust Company, Member FDIC.

New York City residents: Translation or other language access services may be available. When calling our office regarding collection activity, if you speak a language other than English and need verbal translation services, be sure to inform the representative. A description and translation of commonly-used debt collection terms is available in multiple languages at

Branch Banking and Trust Company is now Truist Bank. Learn more.

BB&T and SunTrust have merged to become Truist. Both institutions will continue to offer independent product lines for a period of time. This may include differing underwriting guidelines, product features, terms, fees and pricing. Our friendly teammates at your local SunTrust branches will be happy to walk you through their respective products. You can also learn more by contacting them at 800-SUNTRUST or

BB&T Complete Client Protection

about Truist Bank