Succession: What’s at Stake When You Don’t Have a Plan

If you’re a business owner who doesn’t have a plan for how your business will continue without you, you’re not alone.

~70% of family-owned businesses fail to survive the transition from the first to the second generation, and only about 12% make it to the third.
47% of family business owners looking to retire in the next five years do not have a successor identified, indicating a significant gap in succession preparedness.
70% of business owners strongly agree that having an exit strategy is important to their future and the future of their business, yet only 23% have a plan in place.

It’s understandable that, for many business owners, succession planning often falls to the bottom of the list: You’re caught up in the day-to-day of the business, and stepping away for something that doesn’t feel immediate or urgent can feel impossible (especially if you’re younger and not quite approaching retirement).

On top of that, thinking about leaving—or letting go of what you’ve built—can bring up discomfort or emotions you’d rather not face. If you have a successor in mind, you might fear the conversation or announcement could create conflict in your family or across your team. Or, you might not have a successor in mind at all, which is a whole other problem.

What’s at risk when you wait

Whatever the reason you’ve stalled on planning your succession, the cost of inaction is high.

Higher risk of failure: Without a plan, an unexpected departure—due to illness, burnout, or other emergencies—can leave the business without clear direction or leadership, which often causes stalled growth, eroded culture, and internal power struggles.
Decreased value: If your intention is to pass the business to a family member or sell it, poor planning can significantly reduce your business’s value and its chances of long-term success.
Lower engagement: When employees don’t see a clear future for the business, especially at the top, it can lead to anxiety, confusion, disengagement, and attrition.
Family or internal conflict: In family-run businesses, avoiding succession conversations can create confusion and resentment among stakeholders.
Missed mentorship opportunity: Without a succession plan, there’s often no intentional development path for the next leader—leaving them unprepared when the time comes.

Whether you’re 35 or 65, succession planning is one of the most important leadership responsibilities you hold. Succession planning isn’t about walking away—it’s about leading with intention. Creating a plan doesn’t mean leaving tomorrow; it means ensuring your company can thrive long after you’re gone on your terms. It’s an investment in your people, your customers, and the legacy you’ve worked so hard to build.

Join us July 10 for a discussion on succession

Our Q3 Business Owner Series (our community’s quarterly peer-to-peer learning event) will focus on succession. Join us on Campus as a member of the Aileron community shares his experience preparing for his succession. Ask your most pressing questions in a Q&A session plus connect with the Aileron community and deepen your support network while learning from other business owners.