Fewer than 15% of America’s family-owned businesses pass smoothly to the next generation, and consultant Nicholas Mukhtar traces much of that failure rate to timing rather than money. Parents wait until a health scare or a retirement deadline forces the conversation, he says, instead of building financial literacy and ownership expectations into a child’s upbringing years ahead of any handoff.
“The biggest mistake is not getting their kids involved early enough. You don’t know what life has in store,”Mukhtar told The American Reporter.
A Small Account and a Decade of Practice
Mukhtar’s own advice to clients starts small. “They set their kids up with a small account at age 10 or 11, have them pick stocks, and teach them the value of time in the market, saving money, and allocating into buckets,” he said, describing the approach families he advises use to build comfort with money long before a business ever changes hands.
Only 20% to 30% of businesses that go to market ever sell, leaving up to 80% of owners without a clean way to convert decades of work into retirement income, according to the Exit Planning Institute’s research on owner readiness. A family successor who already understands the company’s finances and operations removes one of the biggest obstacles to a sale falling through: buyer or heir uncertainty about whether the business can run without its founder.
The institute frames that shortfall as a wealth-transfer problem as much as a business one: owners who spent decades building equity in a company often have no route to convert it into retirement income if a sale never closes.
Why Successful Owners Struggle Most With Planning
Mukhtar sees a pattern that cuts against intuition: owners with the most drive to build a company are often the ones least equipped to pause and plan its future. “When you’re a high-performing, high-achieving individual, it’s even harder to slow down and actually do family planning with the people who matter,” he said.
Heirs who inherit a business without that groundwork often struggle to hold onto it, compounding the same instability Mukhtar is trying to prevent by starting the conversation early rather than waiting for a health scare or a retirement deadline to force it.
That gap between drive and planning shows up across the 2.3 million businesses baby boomers currently own, most of which employ workers whose jobs depend on a transition plan existing before it’s needed rather than after.
