NEALABC Beating the FOB Odds

Beating the FOB Odds

One of the most vital engine components in the US business economy is the family operated business (FOB).

FOBs represent 19% of all US businesses. They produce 78% of all new jobs and 60% of the total workforce.

Yet there are troubling undercurrents to this American success story. Only 30% of FOBs get successfully transitioned to the second generation and only 13% make it to the third generation.

Businesses come and go for a variety of reasons. What contributes to these eye – opening statistics – cost, cash flow, productivity, sales, marketing, quality, competition etc.?

The failure rate however among FOBs have six significant commonalities:

  1. Poor succession planning
  2. Unprepared leadership
  3. No strategic business plans
  4. Different generational visions for the future
  5. Family conflict and trust
  6. Lack of a trusted advisor

They do not emerge as a “big bang”, but rather slowly and insidiously.  If unattended, they become the negative obstacles that eventually lead to deteriorating family relationships much less the end of the business.

There are many issues i.e. legacy of the founders, family values, leadership, roles and responsibilities, future strategic direction, transition process etc.

What can be done to mitigate a painful emotional and financial outcome?

The first course of action is to choose a trusted advisor to begin the proactive process of examining the future desired state of the entire family unit.

NEALABC has the talent, temperament, and experience to help navigate these very deep and wide FOB issues. For a free assessment call 480 -229 -7800 or email Dave Neal at

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