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Q: Need information on family run businesses ( Answered 5 out of 5 stars,   1 Comment )
Subject: Need information on family run businesses
Category: Business and Money > Small Businesses
Asked by: vistagejosh-ga
List Price: $100.00
Posted: 06 Jul 2006 14:11 PDT
Expires: 05 Aug 2006 14:11 PDT
Question ID: 743890
I need to know some information on family run businesses.  Is there
any research out their specific to family businesses?  How many of
these businesses exist in the US?  What is the typical size (in
revenue) or a family owned business?  What portoin of the US economy
comes from family owned businesses?
Subject: Re: Need information on family run businesses
Answered By: bobbie7-ga on 06 Jul 2006 15:24 PDT
Rated:5 out of 5 stars
Hello Vistagejosh, 

There are over 24 million family-run businesses in the United States

?A recent survey by the Raymond Institute for Family Business places
the number of family-run businesses in this country at over 24 million
and finds that they are posting higher revenues despite the slow
economy -- up 50% since 1997. Family businesses are also slower to lay
off employees in hard times, plan better for the future, and provide
more opportunities for women than non-family businesses. Nor have
these facts been lost on investors. A new study in the Journal of
Finance finds that family run businesses are 5% to 6% more profitable
and tend to be valued 10% higher by the stock market than their
non-family run counterparts."

Wall Street Journal: Career Journal


Mean revenue

?Mean revenue from family-owned firms surveyed has grown to $36.5
million, up more than 50 percent since 1997, according to the survey
conducted for the MassMutual Financial Group and the George and Robin
Raymond Family Business Institute by researchers at Babson College,
Kennesaw State University and Loyola University Chicago.?

Report: Family business growth outpacing economy
Boston Business Journal


BusinessWeek published a special report about family owned business this year.

?The first part will spotlight some of the oldest, continually run
family-owned businesses in America. Parts two and three take a look at
transition, first from the perspective of boomers who are preparing to
let go of the business, and then from that of the younger generations
getting ready to take over. Finally, part four will consider the
various options available to families that decide it's time to exit
the business.?

Special Report -- Family Owned Business

?Family-owned businesses continue to form the backbone of the American
economy. Consider the following statistics reported by the University
of Southern Maine's Institute for Family-Owned Business: Some 35% of
Fortune 500 companies are family-controlled. Family businesses account
for 50% of U.S. gross domestic product. They generate 60% of the
country's employment and 78% of all new job creation.


?Only one in three family businesses succeeds in making it from the
first to the second generation.?


?Each succeeding generation has its own ideas about taking the company
forward -- or if, indeed, it wants to join the family business at all.
Successful transition has always been crucial to the continued success
of family businesses -- and the next 10 years will see a major
increase in the number of companies facing that hurdle, as more baby
boomers begin to retire.?


Compared with 10 or 20 years ago, the sense of duty and obligation to
join the family business has weakened, while the sense of entitlement
has grown.

"There's always a decent greed factor out there, whether it's between
father and son or between established business executives," says Tom
Holly, a tax partner with PricewaterhouseCoopers' Private Company
Services practice, who works with a number of family-owned businesses.
"But I think there's a substantial entitlement discrepancy between the
first and second generations." At the same time, Holly says: "I'm not
seeing the second generation as actively involved in the business as
they were 15 to 20 years ago."


?Another trend that has been unfolding over time is that increasingly
daughters and granddaughters are taking over the family business.
Three years ago, MassMutual Financial Group and the Raymond Institute
American Family Business Survey released a report that found that
woman-owned family businesses have increased by 37% in the last five

According to the study, these are substantial businesses with $26.9
million in average annual revenues, with some reporting $1 billion in
sales. Moreover, the report also stated that women-owned businesses
were more likely to focus on succession planning, have a 40% lower
rate of family-member attrition, tend to be more fiscally
conservative, and carry less debt than male-owned businesses.?

BusinessWeek: FEBRUARY 13, 2006 
Special Report -- Family Owned Business

Below you will find direct links to the other sections of this informative report.

Tips for Tough Transitions 

?When the older generation steps down, family members are faced with
difficult decisions about the future of their business. Here's some
expert advice?

Special Report -- Family Owned Business
FEBRUARY 16, 2006

Making an Educated Decision

Family-Biz Circle: The Boomer Handoff

America's Oldest Family Businesses in the Country


Family Businesses? Contribution to the U.S. Economy: A Closer Look

Total Number of Family Business in the United States. 

?The  (broad) definition finds a total of 24.2 million family
businesses in the United States, or 89% of all 2000 business tax

According to our middle definition, 10.8 million family businesses
operate in the United States, representing 39% of all 2000 tax returns
but 89% of businesses that the owner claims are his or her ?principal
source of income.?

Our high-family-involvement definition finds 3 million family firms in
the United States, representing 11% of all 2000 tax returns but 54% of
all ?employer? businesses.

The results of each definition obviously show vast differences. The
three rings of the bull?s-eye in Figure 3 show how definitions can
affect the size of the family business universe. We are not suggesting
that the center ring is the real or best family business universe?only
the most narrowly defined. This illustrates that the criteria used to
define a family business play heavily on the overall perception of
family businesses? contributions to our economy.?


?No matter what criteria are used, family businesses represent a
substantial portion of the U.S. economy and have a massive impact on
the economy as a whole.?

Source: The Family Firm Institute


?Of all small companies in the U.S. employing fewer than 500 people,
88% are owned by families. According to The Family Business Institute
(2005), 24.2 million family-owned U.S. businesses generate 64% of the
gross national product and employ 82 million people (62% of American


Facts about Family-owned businesses: 

?In the past five years, Americans have started mare than 3 million
family businesses.

Family-run businesses account for half of the nation?s gross domestic product.

Nearly 35% of family-owned businesses are Fortune 500 companies
including Ford, Wal-Mart and Anheuser-Busch.

Approximately 60% of all public companies in the US are family controlled.

Family-owned businesses account for 60% of total US employment, 78% of
all new jobs, and 65% of all wages paid.

Many family businesses were started after WWII.

There has been a significant increase in new family businesses since
September 11, 2001.

More than 25% of family firms expect the next CEO to be a woman.

More than 30% of all family owned businesses survive into the second generation.?

The Cox Family Enterprise Center


Cox Family Enterprise Center offers numerous research reports and
articles on family business issues

For example:


The American Family Business Survey is a comprehensive and
statistically valid survey that analyzes planning, growth and
succession issues in detail. This survey delivers insights on the
critical issues facing family businesses.

?Family firms constitute a major force in American business.?
?Those surveyed report mean annual revenues of $36.5 million, and the
majority express strong optimism for their companies? prospects.?

Download the complete publication here:

American Family Business Survey

Family Business' Contribution to the US Economy, published in Family
Business Review in 2003, is a report of the impact of family business
and covers GDP contribution, number of businesses and employment. A
new table provides estimates of family business's contributions to
employment by firm size.

Download here:

Additional family business research reports and published articles are
available here:


Other family business reports:

Challenges in Managing a Family Business (14 pages)

Transferring Management in the Family-Owned Business 


Search terms:
"24..50 million family * businesses"
" family business" research reports

I hope the information provided is helpful!

Best regards,
vistagejosh-ga rated this answer:5 out of 5 stars and gave an additional tip of: $20.00
Great work, very thorough!  Thanks!!!

Subject: Re: Need information on family run businesses
From: bobbie7-ga on 07 Jul 2006 07:31 PDT
Thank you very much for the five stars and nice tip!


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