December 2, 2021

Beyond Going Long

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The number of successful family businesses and entrepreneurs is increasing, but heirs are a problem

The number of successful family businesses and entrepreneurs is increasing, but heirs are a problem

The share of family businesses and successful entrepreneurs is constantly increasing. Most successful family businesses and entrepreneurs in Slovakia and the Czech Republic believe that one of their grandchildren will take over their business. In fact, according to Petr Jakubička of Across Private Investments, up to 70% of wealthy families are not able to successfully pass assets from one generation to the next.

Whereas after the fall of communism, entrepreneurship was spontaneous and we did many things, so to speak, “on the go”, today, according to Jakubika, many entrepreneurs realize that economic success can be ensured thanks to comprehensive and planned planning and property delivery to the next generation.

Entrepreneurs’ concerns are justified

If we take into account that we have been doing business freely in Slovakia for about 30 years, and unlike more developed countries, we lack respect. The historical experience has stalled with the transfer of assets between generations, the concerns of many entrepreneurs or business owners are justified, he said.

As Michal Šubín of Subin & Partners continues, one of the fundamental errors is the absence of the family and property-related values ​​defined by the founders.

“People who started a business in the ’90s have no experience and nothing they can count on, they haven’t been able to define values ​​and pass them on to their children, and they can’t count on them in the future.” Shubin said.

Family business is affected by many factors

According to him, the uneven distribution of property among the heirs is also a problem, which leads to a crisis in the family relationship, as well as the lack of rules for managing property.

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However, it is also a different and unequal treatment of children. According to Lubin, the big problem within the family business is also the fictitious work of a family member or the remuneration that does not correspond to the work done.

According to Lubben, the entrepreneur must think about the issue of inheritance, and therefore whether the family wants to own the property or just control it. According to him, the number of heirs of the entrepreneur is also important for the future.

For the correct planning of the complex structure of a family, it is necessary to take into account the interrelationships of family members and their ability to acquire and manage property in the future.