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Family members need training to inherit business

Family business owners need to train and develop their relations, if they hope to maintain business control.

According to the 2007 Survey of Family Business Needs, nearly half of businesses do not have mentoring programs in place for family members, yet fear losing control to trained non-family employees.

“There is a gap between the fears business-owners perceive and the action they are taking to mitigate them becoming a reality,” says Graeme Matthews, national managing partner of KPMG’s Middle Market Advisory Practice. “Family business leaders who neglect the business education of their own family members are facing the inevitable reality of the eventual loss of family control and ownership of the business.”

Family business management structures are also decreasing, and only one quarter of participants had formal succession plans. “Succession plans are not a high priority for our respondents, with retirement 10 to 15 years down the track,” says Philippa Taylor, CEO of Family Business Australia. “This is a disturbing trend when you consider how much wealth is locked in family businesses and can be easily eroded by disagreements between family members.”

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