Survival over generations is critical for family-owned businesses (FOBs). Only 3% of family firms survive the 3rd generation, and a succession strategy is the most challenging decision for family business leaders to make. The purpose of this multiple case study was to explore nonfinancial succession planning strategies that 3rd-generation FOB leaders in Flanders, Belgium, apply for the transition of ownership and leadership to the 4th generation. The conceptual framework for this study was the socioemotional wealth paradigm. Data were collected using semistructured interviews, archival document reviews, company internal and public documents, and press releases. Yin's 5-step data analysis was applied to identify themes and patterns. Analysis of the data revealed that, among these 3rd-generation FOBs, the socioemotional aspect of generational succession planning required strategies that simultaneously focused on successor suitability and well-being, consensus of the family, mode of transition, leadership and governance, and survival of the family firm. These findings may provide other, similar FOB leaders with insights into the dynamics of a successful transition of the 3rd-generation family firm to the next generation. Findings may be used to increase FOB survival rates, provide new job opportunities, contribute to community growth, and enhance the well-being of stakeholders. Successful family firms may engage in philanthropic activities as a way of transmitting legacies between generations.

ABSTRACT Demographic forces in the U.S. economy can be expected to have a significant impact on the behavior of small business owners, particularly as it relates to their ownership transitions and exiting from their privately held firms (the development of “harvest” strategies). The ability of business owners to identify entity value and communicate this to the market (market signaling) could be a key determinant in maximizing sellers’ payouts at the dispositions of their businesses. Historically, payouts have been maximized through transactions with strategic buyers, who have pre-existing knowledge of the seller’s industry or market thereby permitting rapid value accretion for buyers. However, a current unprecedented level of capital available in the private equity market has created a sea of financial buyers who, despite having available capital, may not have the industry or firm specific knowledge which permits the rapid value accretion in an acquisition as it would a strategic buyer. In turn, seller payouts may be suppressed because of selling to financial buyers. The primary focus of this paper is to explore how sellers view the differences between the two types of buyers and the implications for seller payouts. More broadly, it addresses the importance of market signaling and its impact on seller payouts. / Business Administration/Entrepreneurship