Passing the crown: Half of local family businesses grapple with succession woes

Good heirs are hard to find.

Family enterprises have to deal with a lot of challenges when it comes to ensuring that the business stays afloat. But family-owned firms and closely-held enterprises are discovering that the internal quest for an heir may well be their greatest stumbling block.

According to the SME Committee of the Singapore Business Federation, succession planning is one of the toughest and most critical challenges for small business. SMEC cited a UOB Small Business Survey conducted in November 2014 which revealed that one in two respondents voiced concerns over finding suitable successors to replace their key person.

Many successful companies also choose to cash out, selling to overseas buyers after building a viable business. SMEC urged the government in to establish a single SME entity which can focus solely on SME issues in the 2015 Budget.

“The Singapore brand that has taken many years to build is often lost following the sale. Strategies on succession planning are overdue and this aspect may be suitably undertaken by the single SME authority as part of its overall development strategy to help successful global companies with the Singapore brand sustain and transform into multi-generational institutions long after the founding members are gone,” stated SMEC.