Succession Remains Major Hurdle for Private Business Owners

Private business owners recognize they must address how to pass down both their wealth and their companies, according to new research from advisory and investing firm Brown Brothers Harriman & Co. Yet the firm’s third annual Private Business Owner Survey revealed that many continue to struggle with the timing, structure and transparency of those transitions.

Owner respondents said a range of factors shape how they plan for both their own future and that of their businesses, including governance and succession planning, long-term strategic goals, capital requirements and, in many cases, the complexities of family dynamics.

Nearly half of surveyed owners (49%) said they believe the next generation is only “somewhat prepared” to manage wealth, while 40% said they consider it unprepared. Many hesitated to share details with the younger generation about family wealth or ownership structures, fearing it could lead to entitlement or unrealistic expectations. The BBH survey authors noted that this lack of openness often delays the development of critical skills and alignment on family values, purpose and legacy.

“Succession planning remains one of the biggest vulnerabilities for private businesses, and a large part of that stems from worries around successor readiness,” said Kathryn George, a partner in BBH. “Like estate plans, sharing an ownership transition plan can happen through several age-appropriate conversations about the business—its values, legacy and mission—over time.”

Only 46% of business owners reported having a formal succession plan in progress, and 30% said they had none. Leadership continuity, sustaining company culture and maintaining innovation ranked among respondents’ biggest challenges. The research also identified a growing “skip-generation” trend, in which some owners considered transferring control directly to grandchildren, rather than to immediate heirs.

At Strategic Retirement Partners, Erin Hall—a 2025 PLANADVISER Top Retirement Plan Adviser—said her practice was evolving, as the broader industry was poised for major transformations. She previously told PLANADVISER: “We anticipate several key shifts, and the firm is focused on building for the future by developing internal talent, recruiting strategically, leveraging new technologies and expanding capabilities, while our core values remain constant.”

Balancing Growth, Reinvestment, Legacy

While the complexities of succession remain top of mind, growth continued to dominate business priorities in the survey results. According to BBH’s findings, 77.5% of owners ranked growing the business above taking dividends or maintaining full equity stakes. However, alignment within ownership groups on long-term capital strategy remained uneven.

Many private business owners reported evaluating new financing approaches—from debt instruments to minority equity stakes—to support ownership transitions without sacrificing momentum. On dividend policies, meanwhile, owners reported weighing the right balance between rewarding shareholders and ensuring the company’s capacity to reinvest for sustainable expansion.

“There are numerous ways to set dividend policies—not a one-size-fits-all formula,” said Ben Persofsky, managing director and head of the BBH Center for Family Business, in a statement. “Ultimately, a thoughtful dividend strategy not only rewards shareholders but also safeguards the company’s ability to reinvest and grow sustainably.”

Tom Davis, a partner in and head of the BBH Multi-Family Office, added that growth is more than a goal—it’s a strategic necessity. He said in a statement: “Durable growth gives owners greater control, more options for their future, and the ability to shape the legacy they want for their companies and families.”

The survey was conducted in July and August among 491 respondents from family-owned and privately owned companies.