Facts about Family Business

  • Family owned businesses resourceful. ROA is greater in family businesses, averaging a 6.65% greater return than non-family firms. (ffi.org, 2010)
  • Family owned businesses have longevity. The average life span of a family-owned business is 24 years (familybusinesscenter.com). About 40% of U.S. family-owned businesses turn into second-generation businesses, approximately 13% are passed down successfully to a third generation, and 3% to a forth or beyond. (Businessweek.com, 2010)
  • The largest family owned business in the US is Wal-Mart Inc., with $408 billion in revenues and 2.1 million employees in 2009. (forbes.com, 2010)
  • More FOBs are finding leadership from outside the family. Between 10% and 15% of U.S. family firms are now managed by non-family executives. (Barclays Wealth and The Economist Intelligence Unit, 2009.)
  • Emergency planning is vital. In nearly half (47.7 %) of all FOB collapses, the failure of the business was precipitated by the founder's death, or in 29.8% of the cases, the owner's unexpected death. Only in relatively few instances (16.4 %), did the business failure follow an orderly transition, and in situations where the owner was forced to retire, the figure drops to 6.1%. (University of Connecticut Family Business Program, 2009)