BUSINESS PLANNING FOR THIRD GENERATION CONTINUATION BUSINESSES

Abstract

This paper investigates the application of structured business planning in the long-term sustenance and financial viability of 3rd generation family businesses. In response to the dilemma of second-generation sustainability, the study explores the factors of strategic planning, succession planning, and, probably, financial health vital for the business continuation. Secondary data involved business reports from more than 150 third generation business owners while the data collection techniques used were questionnaires and interviews. For the purpose of generalization and increasing the variability in the sample, the chosen approach was stratified random sampling. Descriptive statistics, including frequencies and means, regression analysis using a linear regression model, analysis of variance (ANOVA), and structural equation modeling (SEM) with the help of SPSS 27 & AMOS 24 were used for quantitative analysis. Hypotheses one and two suggested that succession and continuity plans increase financial stability and continuity success and were supported by the results: (F = 43.30, R² = 0.42, p < 0.001, β = 0.71, p < 0.001). With planning the surveyed business showed 35% more increase in their revenue and life expectancy of a business having a structural planning was 60% for more than the third generation while a company without planning was 20%. This reasserts the established knowledge that it is relatively unsuitable to separate the corporate financial planning from succession management for generational continuity.