According to a PwC survey, around 751,000,000 family businesses in Brazil end up closing down when they are succeeded by heirs. Furthermore, almost 90% of Brazilian companies are family-owned. So what do you do in a scenario like this?

Succession: planning is key

Although it is obvious that succession planning is as fundamental to succession in family businesses as strategic planning, not all companies prepare for it.

And this explains the absurd figures shown by the PwC survey regarding bankruptcies.

The truth is that many family businesses face significant challenges even when planning and implementing the transition of leadership to the next generation.

Main challenges in succession

Among the main succession challenges are:

• Preparing the next generationOne of the biggest challenges is preparing heirs to take on leadership roles. This involves adequate training, practical experience and, above all, the development of management and leadership skills.
• Family conflictsThe management of internal conflicts is common, especially when there are disagreements about who should lead the company. These conflicts can be detrimental to the business if they are not well managed.
• Professionalization of managementAnother barrier is the need to professionalize the company's management, separating family issues from business decisions. This may include hiring external executives or consultants to help with the transition.
• Succession planningThe succession plan: planning ahead is essential, but many family businesses in Brazil still don't have a clear succession plan. This can result in chaotic transitions and, in extreme cases, business failure.

In any case, the best way to overcome these challenges is to invest in external training and consultancy, which has a keen and neutral eye for the development of new leadership.

A well-planned succession

Successful succession not only guarantees the continuity of the company, but also protects the family legacy. Involving experienced professionals and creating a structured succession plan are essential steps to avoid the common risks associated with this process.

One example of success is the succession that is taking place in the Elian Group, with the eldest daughter of the couple who founded the company in Santa Catarina.

The Group has undergone training The Five BehaviorsHe gave a detailed interview about the process. Watch now: