There are more than 12 million family businesses in the United States today. Timely planning will help ensure that your family business will be the one in three that survives succession - and the one in seven that survives a third generation.

Many business owners assume their children will take over when they retire or die. But what if they don't? Should they or their estate sell the business to key employees? Or shut it down?Let's assume your children do decide to take over your business. Should it be sold to them? Given to them as a gift? Bequeathed to them in your will? These questions need to be answered now - because no one can predict the future.

These questions can be answered properly only through thorough planning, starting with a business plan. Through this process, you define the company, target its marketing opportunities, appraise its competition, determine its financial needs and resources and adopt a method of succession.

Change is inevitable. Understanding customers and their needs, adapting to new conditions and snapping up opportunities as they arise, along with winning products and services, usually ensure continued prosperity.

Strengths, weaknesses and relative market position can be determined through an appraisal of the competition.

The review or implementation of controls and systems will enable you to see where your money is going.

Financial planning is critical. By assessing needs and resources, problem areas can be identified and tax burdens minimized, while you build and diversity your assets.

The next step is planning for succession. There are business and human aspects to consider. How do you pass your love for the business on to your children? It most likely comes from family closeness and an understanding of each other and the business. There also, however, needs to be a reason to grow - a faith in the future of the business. As your dedication grows, so will the dedication of your successors.

Planning for the succession requires preparation, confronting major issues before an emergency arises. The successor needs to be someone like yourself - committed to the business, with maturity, interpersonal skills, managerial skills and a strong dose of common sense. Don't, however, force your style onto your successor.

Your business evolved over time, and it is important that your successor has broad training and experience. That may come from an in-house program or from working in a related business. This is important, because credibility needs to be fostered in the minds of employees as well as customers.

Estate planning is a key to ensuring the life of your business. This should be done while the business is operating successfully and your successor is being groomed. Lack of estate planning can lead to tragedy.

Your family business can be passed on successfully. To do so, however, required planning.

Scott W. Pickett is with Emerging Business Services, Coopers & Lybrand.