Family businesses continue to be important. There are forever going to be a wide range of different things working for and against this reality. Statistics overall do not particularly favor the idea of starting a new family business in this day and age, simply because starting a new business in a general sense is such a difficult measure. Nonetheless, people are going to continue to try. If you’re someone who is giving serious thought to making this dream a reality, or if you’re simply curious about some of the statistics that come with the subject of family-run businesses, there are a few things you should familiarize yourself with.
Family Business Facts And Figures
There is a certain romanticism that goes with the concept of the family business. There are also a number of statistics that are well worth paying attention to:
1. 4.3 million family businesses were shut down during the recent Great Recession. That comes to out to 18% of all the family-run businesses that were in existence at that time.
2. Anywhere from 70-90% of global GDP is generated by family businesses. This is because the family business is dominant in both developing and developed nations.
3. Anywhere from 80-90% of the North American GDP is generated by family businesses. 64% of the U.S GDP comes from family businesses, which are currently employing 62% of the United States population.
4. 34% of the current S&P companies are family businesses. Walmart and Lowes are two good examples.
5. Family businesses enjoy a ROA that’s 6.5% better than businesses that are not owned by families. On average, a family business has a life of twenty-four years.
6. As merit-based promotions continue to be the norm, it’s interesting to note that 34% of family-owned businesses intend to name a woman as the next CEO.
7. Transitions are one of the most prominent killing blows to a family business. 29.8% of failures occur in the aftermath of the founder’s death.
8. One of the biggest problems facing family businesses is the lack of an ownership plan. Less than 30% of family-owned businesses have complete estate strategies.
9. Non-family recruitment has been named as the single greatest problem facing family businesses by those who work in them.
10. For the problems listed above and others, the Family Institute Plan can help a family-owned business address these problems, handle them, and move on to bigger and better things. Utilizing outside help can be tremendously rewarding.