The exploratory research of this paper provides an insightful outlook on succession planning in
Thai family-owned SMEs as succession issues heighten in the wake of an increasingly volatile
global business environment. From our study, 22% of business owners are aged 60 and over
(as of June 2011) and, therefore, a significant numbers of voluntary and involuntary exit from
their businesses will occur over the next three to five years. These approaching transitions face sobering
statistics: only 14–30% of family businesses are transferred to the second generation, and just 10–15%
survives into the third generation (Applegate, 1994, Beckhard and Dyer, 1983 and Dyer 1986). The
existence and quality of succession planning potentially affects the sustainability of Thai family-owned
SMEs. Adopting a survey questionnaire (to 330 respondents, response rate 33%) and 30 face-to-face
interview, we document a general lack of formal succession plan among Thai SMEs. While business
owners have a strong desire to transfer their businesses to their descendants, there remains either no
arrangement or merely an informal agreement and often with no knowledge of descendants’ willingness
to be involved in the family business. Given that this lack or lacklustre planning may negatively affect
SME businesses as well as the larger economy, business owners who do not vigorously pursue the
establishment of a succession plan risk uncertain and unplanned behaviour in the face of unforeseen
events. Formal succession planning is normally delayed until what is perceived as the right time and
when the right person has come along to take over the business. These findings have implications for
business owners and policy makers in addressing the long-term growth and sustainability perspectives
of family-owned SMEs that warrants due attention in developing and establishing succession strategies
to increase the long-term business sustainability level for future generations.