Blog post provided by NVC member Kristina Wilmer, Market Executive for Global Commercial Banking’s Mid-Atlantic Region, Bank of America.
Across the United States, family-owned businesses are the backbone of local prosperity. They create jobs and community, often reinvesting profits directly into their local neighborhoods. Nationally, 32 million family enterprises contribute $7.7 trillion to GDP and employ more than 83 million people, according to Deloitte’s 2024 Family Enterprise Survey.
These enterprises are more than datapoints — they embody values that families want to preserve across generations. For founders seeking to leave a multigenerational legacy, it’s important to plan carefully to protect your legacy while positioning the company for future growth.
Engage Future Generations Early and Often
With many aging family business leaders planning to step aside in the coming years, succession planning has never been more important. According to Deloitte, 28% of current leaders plan to hand over the reins in the next five years. During the same timeframe, 46% of the next generation hope to move into executive positions. Yet not every next-gen leader is prepared to take on that responsibility.
Families can start by clarifying ownership structures to prevent fragmentation. A family constitution can outline the qualifications and expectations for joining the company, such as completing a degree, gaining outside work experience, or meeting agreed-upon performance benchmarks.
It’s also essential to engage with family members. Annual family meetings, role-playing scenarios, and culture-building activities can help younger members understand the company’s culture, mission, and values. Additionally, independent advisors such as accountants, bankers, financial planners, and lawyers can offer objective guidance, help align expectations, and bridge generational differences.
Build a Strong Board
A well-structured board of directors offers strategic oversight and guidance, professional expertise, and objective decision-making. It is one of the most effective tools for a founder looking to establish a long-lasting family business.
When forming a board, owners should define its purpose, whether it’s to formalize governance, guide leadership succession, or provide market insights. The composition on the board also matters and should include a balance of family members and independent advisors to ensure diverse perspectives. According to a PWC report, age diversity can also smooth leadership transitions, allowing seasoned members to mentor emerging leaders. Formal agreements around roles, term limits, and decision-making processes help maintain accountability.
Preserve Philanthropic Commitments
Local family businesses often serve as community pillars, not just because they keep the community employed, but because they give back. According to PWC, 81% report active charitable involvement. Estate planning tools, such as family foundations, can formalize giving strategies and ensure alignment with the company’s mission. These structures also offer legal and financial frameworks for sustaining charitable work across generations.
Generations may approach philanthropy differently among family members. A Bank of America Private Bank study shows that while older generations often favor direct financial contributions, younger donors value hands-on involvement through volunteering, fundraising, and mentorship. By blending approaches, families can maintain a strong community impact while engaging meaningfully with the next generation.
Embrace Strategic Transformation
Adaptability is essential for longevity. Mergers and acquisitions (M&A) can expand market reach, strengthen competitive positioning, or diversify offerings. For some families, selling a stake to bring in professional management or welcoming outside investment can accelerate growth while easing generational transitions.
An employee stock ownership plan (ESOP) is another option, transferring ownership to a trust that benefits employees (including family members), who are invested in the company’s success. ESOPs can be particularly valuable for businesses without a clear heir, offering tax advantages and ensuring the company remains locally rooted.
All told, local family businesses are more than economic drivers; they are cultural cornerstones woven into the fabric of their communities. By engaging future leaders, building strong governance, preserving community commitments, and embracing change, these enterprises can ensure their legacy endures for generations.
Kristina Wilmer, Market Executive for Global Commercial Banking’s Mid-Atlantic Region at Bank of America, oversees a team of 15 that counsels middle-market business leaders across a variety of industries. She brings deep expertise in credit, treasury, and investment banking, along with a background in private equity and consulting, to help public, family-owned, and private equity-backed companies achieve strategic growth.
NVC Members Only: Want to be featured on the NVC Blog! Pitch your blog post idea.
