For years, we've heard warnings about the financial and social consequences of the baby boomers' impending retirement. Yet, despite the predictions, no one is certain what they will be.

The impact has a parallel in the world of family business. Boomer ambition created many successful businesses, but as the founders retire, questions about their future come to the forefront.

According to the "Family to Family: Laird Norton Tyee Family Business Survey 2007," which was recently completed, more than 50 percent of family business leaders in Washington state plan to retire in the next five years. Yet only 38 percent have chosen a successor to their position and, even more frightening, fewer than 30 percent have a written succession plan. The next generation of leaders will pick up where their predecessors left off, without a road map of what's coming next for the family business.

This could have serious economic effects on our state. Washington is home to more than 5,000 privately held businesses with revenues between $5 million and $250 million. These economic engines contribute $131 billion in sales and employ half-a-million people. Roughly half have been in business longer than 20 years.

The good news is that Washington's family business leaders are optimistic about their future, more so than in the rest of the country. As with the boomers, the future isn't clear. However, early planning can alleviate later pains. For those considering passing their business down the generations, here are three plans to think about.

First, stop putting off the written succession plan. While many consider it the first step out the door, it should be seen as an active step to ensuring that your legacy lives on. Whether passing the business to a younger family member or transferring private shares to a senior manager, planning early helps identify the next generation of leadership, allows them time to develop the necessary skills to run the business successfully, and gives you time to mentor.

Next, create a written strategic plan. In Washington, 40 percent of businesses surveyed do not have written strategic business plans. A strategic plan can set the wheels in motion for both organic and acquisition

THE GOOD NEWS IS THAT WASHINGTON'S FAMILY BUSINESS LEADERS ARE OPTIMISTIC ABOUT THEIR FUTURE.

growth, facilities expansion and identifying new markets. Working without one can leave you limping along day to day, missing opportunities that a clear vision would have helped you capitalize on.

Finally, create a board of directors, joining the 65 percent of family businesses in Washington that have already done so. The board can act as a source of new business ideas and perspectives and will help when transitioning your business and searching for a successor.

Prepare the next generation early, whether they will work in the family firm or not, by discussing the family history and business. Four out of 10 business families surveyed in Washington talk to their children about these matters before they turn 18.

Accession is as important as succession. Not all family members will join the business, but for those who do, knowing the expectations is critical. Establish guidelines for entering the family business, what level of schooling and outside work experience is expected, and how compensation will be established. Making these distinctions clear early on will minimize potential conflict later.

You should also consider creating a family council to deal with questions, such as which family members can join the family business, how to deal with sibling conflict and rivalry, and whether spouses or other non-blood relatives are permitted to own stock in the family business. Family councils can also plan for family meetings, developing the next generation of leaders and instilling a sense of family stewardship.