Succession Planning Study

Most family businesses fail to make the transition to subsequent generations without careful planning. Succession planning is no different from other major planned changes in an organization undertaken under the principles of organizational development. This paper examines succession planning in family owned farm equipment businesses located in seven western states. Past studies exist on succession planning in family owned businesses in general but, little research exists on succession planning in the industry segment of family owned farm equipment businesses. 

This quantitative study was undertaken to determine rates of succession planning in this industry segment, reasons why the businesses failed to plan, and if existing plans were comprehensive.  It also set out to determine if the owners involved key people in the planning, if they communicated the plans with key people, and if interest existed among these businesses for tools or resources to assist with succession planning.  After examining previous research on succession planning in family businesses, this study utilized a Likert type survey to obtain data from 139 business owners belonging to the Far West Equipment Dealer’s Association, a trade organization representing these businesses. 

The study created and administered a survey after examining previous research on succession planning and with feedback from the executive board of the surveyed organization. The survey discovered that the majority of families with succession plans felt the plans were comprehensive, had involved others in the planning, and that owners communicated their plans with key people. The survey respondents also indicated interest in tools or resources to assist with planning and provided some possible options in comments submitted with the survey. Significant recommendations included making available resources to help the businesses begin planning or to check if their current plans were missing any critical elements and educational programs.

Click here to read the full paper by Jason K. Orton.

Click here to view his presentation on Succession Planning in Family Owned Farm Equipment Businesses.