Family Business

Family Business Statistics

  1. Family owned businesses account for 65% of total U.S. employment and 65% of wages paid.
  2. In the US today, there are an estimated 1.2 million businesses that are owned and operated by husband and wife business partners on a day to day basis.
  3. Between 2001 and 2006, the total number of family businesses under a female family member’s supervision had grown by 37%. The average annual revenue of one of those businesses stood at $26.9 million in 2006.
  4. One study found that contrary to the prevalent stereotype of family businesses as nepotistic and conflict-ridden underperformers, family firms perform better than nonfamily firms. In fact, the study notes, 35% of the S&P 500 firms are family-controlled, outperforming management-controlled firms by 6.65% in return on assets (ROA).
  5. In the 2007 US Fortune 500, around 35% of all companies listed were family businesses, thus indicating that family businesses are important at all levels of the American economy.
  6. Family companies created 78% of all new jobs in the US in 2007.  This suggests that family businesses are on the rise and is one of the fastest growing areas of the US economy today, and an invaluable one at the present time.FamilyFirmSuccessionDotCom
  7. In 2001, it was estimated that the majority of American family businesses would have lost their primary family firm owner by 2005, whether to death or retirement. Research by Robert Avery of Cornell University showed this to be the largest family firm transfer of wealth between generations in American history.
  8. Robert Avery, an expert in family business from Cornell University, has estimated that $4.8 trillion will be transferred to the next generation of family business owners in the U.S. between 2000 and 2020.
  9. In surveying 800 family businesses, the University of Connecticut Family Business Program found the three main causes of American family businesses failing are due to poor estate planning, failure to prepare for the transition from one generation to the next and high estate taxes. In 47.7% of cases, the death of the primary owner brought about the company’s downfall.
  10. There were between 70,000 and 90,000 family businesses in Connecticut alone in April 2008.
  11. In 2007, the total US gross domestic product (GDP) contributed by family managed firms reached 64%.
  12. Approximately 62% of the American workforce is employed by family businesses as of April 2008.
  13. Only 30% of all American family businesses survive into the second generation, with the majority failing when it comes to handing over to a family member following the retirement of the founder. This may be why only 12% make it into the third generation and 3% into the fourth.
  14. In 2003, Anderson and Reeb found that generally, within a fifty year threshold, family firms outperform other non-family businesses.
  15. On average, the length of time that families own their businesses is 78 years.
  16. 2003 research showed that 80% to 90% of all North American businesses were family owned enterprises.
  17. In 2002/3, family owned businesses contributed $5,907 billion to the American economy.
  18. The American Family Business Survey 2003 found that 39% of family business owners were expected to pass on the family business before 2008.
  19. In 34% of family businesses expect the next CEO to be a female family member.
  20. 52% of all American family businesses will hire at least one full time female family member, while only 10% employ two females on the same terms.
  21. In 2003, 55% of all U.S. family business CEO’s ready to retire within five years aged 61 or older, had not chosen their replacement despite being due to retire between 2003 and 2008.
  22. The American Family Business Survey of 2003 found that family businesses are ill prepared for the future, with only 19% having only made a will and only 37% having a strategic plan. Despite this over 60% are positive about the future of the business.
  23. In 2003, 85% of family business owners in the US had chosen a successor that was a member of the family.
  24. In 2003, Anderson and Reeb found that 33.6% S&P 500 firms were family businesses and within those firms, the average family business equity was 18%.
  25. In 2003, American family business performance was greater by 5.5% (an average of $118.6 million) if the family maintained the ownership stake.FamilyFirmSuccessionDotCom
  26. The CEOs in family businesses earned 10% less than the CEOs of non-family firms in 2003.
  27. The Zildjian Cymbal Co. located in Norwood, MA, is thought to be one of the oldest operating family businesses in the world. It was founded in 1623 in Constantinople and made the trip across the Atlantic in 1929.
  28. Two female members of the family currently operate one of the longest running family businesses in the world and the oldest in the US, the Zildjian Cymbal Co.
  29. In the United States, family business owner’s concerns included passing not only their wealth but also their values and work ethic onto the next generation in 2000. [x
  30. In 2003, family businesses formed 67% of all private sector firms in Australia.
  31. In Australia, family businesses employed over 50% of the workforce in 2003.
  32. The Australian Family and Private Business Survey 2003 established family business growth at 10% a year, which was 5% less than the average growth rate in 1997.
  33. Australian family businesses’ transition of wealth between generations was estimated to be AUS$1.6 trillion between 2003 and 2013.
  34. 29% of all Australian first generation family businesses use an accountant rather than a lawyer for succession planning. Only 29% used a lawyer, which is a trend that has declined since 1997.
  35. The majority of family businesses in Brazil that were set up in the 20th Century are now under the control of the fourth and fifth generations.
  36. 70% of Brazilian business groups hold the largest and most successful family businesses.
  37. Farming is the Brazilian industry that is most dominated by family businesses. There were an estimated 4.1 million family farming businesses in 2004.
  38. Brazilian family farming businesses offer employment to 77% of the rural workforce and actually make up 84% of the rural enterprises countrywide.
  39. The importance of family businesses in Canada, in relation to the economy, is they’ve employed an estimated 6 million workers in 2003 overall.
  40. All Canadian family businesses generated approximately $1.3 trillion of total annual sale between 1999 and 2003.
  41. Only 44% of Canadian family businesses encompass exit strategies despite the fact that 78% of CEOs in place in 2003 were to retire before 2018.
  42. According to the BDO Dumwoody/Compas Report on Canadian Family Business (2003), accumulation of wealth for family business owners was given as the biggest reason why they were in business. They appeared to have no specific desire to pass the business on to the next generation.
  43. Between 75% and 90% of all businesses that are operated within or out of Chile are family businesses, with approximately 65% of family companies taking ownership of all medium to large companies.
  44. The majority of Chile’s large, corporate family businesses consisted of decentralized command structures and little or no shareholder control in 2004.
  45. Farming, mining, food, textiles, fishing, forestry, and manufacturing are all industries lead by the family business in Chile.
  46. Hacienda Los Lingues is the oldest, Chilean family business founded in 1760. It is still in and controlled by the founding family today.
  47. In 2000, Finland was home to approximately 202,000 thriving family businesses, not including family farms, which accounted for a further 78,000 businesses.
  48. Family businesses accounted for 620,000 jobs in Finland in 2001. When you consider that the total population was 5.2 million, you can really begin to understand how important to the economy family businesses are.
  49. As of 2000, 75% of all Finnish family businesses were limited companies. This figure is extremely high, especially when you consider that only 25% were family businesses in proprietorships and partnerships.
  50. An estimated 1 out of 15 Finnish people are involved in a family business. This figure is estimated to be very similar today to that of 2000.FamilyFirmSuccessionDotCom
  51. According to research in 2004, Germany is the home of 1.3 to 3.2 million successful family businesses.
  52. 22 million German people were employed by family businesses in 2004, not including the 3 million owners of businesses.
  53. 70% of the total German workforce contributes to the economy via working for a family business. Smaller companies employ some but the majority are employed by medium to large companies.
  54. The average family firm annual investment of Mittelstand between 1999 and 2004 was €15 billion.
  55. More than 50% of family businesses are relinquished to another family member in Germany. Therefore, many close for business or are bought by non-family members.
  56. The German Wealth Report 2000 identified that an estimated 320,000 Mittelstand companies actively looked for a family business successor to the CEO of the company between 1999 and 2004, of which 84,000 will sell to an outsider.
  57. In 2000, a total of 4.7 million Italian family businesses were registered by the authorities.
  58. Research by the Italian Association of Family Businesses at Bocconi School of Management indicated that family businesses earn between 93% and 99% of all businesses in Italy in 2000.
  59. The majority of small manufacturing firms owned by family businesses in Italy with a specialization in design and engineering. The craft that they pass on to the next generation is very important to them.
  60. In 2000, out of 150 of the largest public companies were family owned in Italy.
  61. Some of the biggest Italian company names are family businesses. For example, Versace, Fiat, Pirelli and Barilla are all known worldwide renown family businesses to this day.
  62. The oldest family owned business in the world is located in Italy. Baretta has been making guns for over 500 years and has remained within the family, and in the same place, for the duration of that period!
  63. As of 2000, 80% of family businesses’ CEOs had been the leader for at least five years in Sweden. As such, their typical leadership lasts longer than that of a CEO in a non-family business.
  64. Unlike trends in the rest of the world, Swedish family businesses are outperformed by non-family businesses. Many family businesses blame politics and poor familial relations for this.
  65. According to Family Business in 2001, the majority of family business of all sizes are not successful and fail within 20 years. Although family businesses are stronger, they tend to end with the first generation.
  66. In the United States alone, 102 companies have remained in the same family since 1865 and many before. This figure was accurate as of 2001.
  67. Of the longest operating family businesses in the US, the business that has gone through the most generations is now in the hands of the 14th generation, which is no mean feat.
  68. 102 American family companies have remained in operation since 1865, out of which 43 are in the manufacturing industry, 21 in farming, 25 in services and 10 family stores.
  69. The majority of family businesses have endured the test of time in the United States have not been publicly traded. This is because trading leaves companies over to corporate takeovers.
  70. It seems that a rural setting is best to ensure longevity in family businesses, because only a handful (27 out of 102) of the oldest companies in America are located in a major urban area. The rest occupy a more rural setting.
  71. French family businesses have headed the French industry for longer than any other form of business, according to research conducted by INSEAD. They have also had a place in the 120 or the SBF 250 indexes for a longer period of time.FamilyFirmSuccessionDotCom
  72. According to research in 2008 by the Keith Busse School of Business & Entrepreneurial Leadership, the average American family business employs at least 50 people on a full time basis.
  73. The majority of American family businesses were established in the five years following WWII with four out of five businesses still controlled by family founders that exist today, whether under the original owner or the second generation.
  74. The manufacturing industry is the biggest sector of the economy for family businesses, with 24.5% of family businesses operating within it. Other major industries are retail, construction and wholesale/distribution.
  75. In the UK, 45% of the UK’s 2006/7 GDP was contributed by family businesses, and this looks set to rise for the 2007/8 year.
  76. A huge 50% of the Scottish private sector workforce is currently working for a family business.
  77. The level of family businesses is lower in Scotland than the average for the rest of Europe. 75% of European businesses are family businesses, but only 70% of Scottish businesses are.
  78. Out of the 100 largest European businesses, family businesses’ size and revenue count for 25 of them.
  79. In terms of equal rights, it’s more common than not for women to take charge of family businesses in Scotland in 2008 compared to what the general trend worldwide would have you believe.
  80. As of 2008, over 33% of the leading family companies are operated in the UK.
  81. Between 2003 and 2008, the Scottish Family Business Association found that the Family Business Index performance exceeded the FTSE All Share Index by 40% during the same period.
  82. 73% of all Scottish family business owners have a desire to keep their business within the family. However, only a third of all family firms will remain within the second generation.
  83. 54% of all Scottish businesses in operation at the turn of 2008 are still owned and operated by the founding generation. As such, the majority of businesses were established after WWII.
  84. According to the Cox Family Enterprise Centre, over 3 million family businesses were established in the US between 2000 and 2005.
  85. As of 2005, 60% of American public companies are controlled and operated by family firms.
  86. According to data collected in 2007 by the Cox Family Enterprise Centre, there have been a high number of businesses established in the US since the World Trade Centre attacks of September 11, 2001.
  87. 27% of Australian businesses that are listed on the Stock Exchange are firmly under the control of the founding family. The total worth of those family companies stands at $3.6 trillion.
  88. In 2004, 80% of all Australian businesses were family businesses which represented an increase of 17% from the previous year.
  89. Research by KPMG and Family Business Australia found that of the 57% of family business owners planned to retire between 2004 and 2014, out of which only 32% had a successor.
  90. In Victoria, Australia, 68% of family businesses that are into the third and fourth generations do not have any form of performance appraisal for family firm members. In 26% of those, there is no actual formal management plan.
  91. A CPA Australia study in 2004 examined the succession plans for 600 small businesses discovered that 30% of family business owners were aged 50 or above and 40% of them had decided to retire before 2009. A little over half of them were family business owners.
  92. Of the Australian family business owners that have laid plans for the succession of the business upon their retirement, only 33% have decided to leave the business to the next generation. 57% have decided to sell it to their children instead!
  93. The reason given as to why only 34% of Australian family business owners’ succession plans were in place was that their business was too small and so no future plan was needed.
  94. An Australian 2004 study revealed that the majority of family business owners wished to remain connected to the control structure of the business. The profits of that ongoing control would be used to fund the owner’s retirement in many cases.
  95. Only 16% of the CPA Australia study’s respondents admitted to having some members of the board who were not related to the founding family of the business in 2004.
  96. Family owned and operated firms are the most dominant type of business in the world as of 1987.
  97. There are numerous studies on worldwide family business dominance, with the majority of estimates falling between 65% and 85% of all business enterprises being family owned or managed.
  98. 95 percent of all American companies are small businesses and that 95 percent of these SMB firms are family owned.
  99. New business start-ups in the US increased 1000% between 1951 and 1984, from 90,000 to 900,000.
  100. In the majority of European countries, family businesses almost wholly make up the small and medium-sized companies that are active today. In certain countries, family businesses dominate amongst the larger firms as well.
  101. Across Asia, family businesses control the majority of economies, with the notable exception of China. This is amazing in itself given the variety of cultures and religions that occupy the continent.
  102. In Latin America, grupos, or family owned and managed businesses, hold a dominant position in the vast majority of industries.FamilyFirmSuccessionDotCom

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