Legacy Academy coaches businesses on how to keep it in the family
There's a lot of truth to the old Chinese proverb that "wealth rarely lasts three generations", says Chan Yue-kwong, the Café de Coral chairman.
"According to a 2010 study by the Chinese Academy of Sciences [CAS], 90 per cent of people running family businesses want to pass them on to their children, but 95 per cent of the second generation don't want to take them up," he says.
I was worried about my own succession, so I sought expert advice
"The CAS found that three million private enterprises in China will face succession issues within five years.
"It's three decades after China launched market reforms, and those who became entrepreneurs in their 30s are 60 years old now. It's time for them to pass the baton."
While talk about succession in family businesses has mostly focused on big conglomerates so far, Chan says it is a pressing issue for small and medium enterprises, too.
"I have a friend who operates 10 factories on the mainland employing 50,000 staff. His son is 26 years old. One day this friend took his son on a visit to three of the factories. The son, who was getting to know the operations, was silent throughout the trip.
"When the visit ended, the son told my friend that he wouldn't be able to do better than him. The son made up his mind that day he would not take up the family business, as he didn't want to sully his father's name.