The 10 Upsides of Family-Owned Businesses
8/7/2019
Creating, building, and sustaining a family business is not only a fundamental American dream (over 20 million family businesses in the U.S.– 92% of all U.S. businesses), but is also a powerful dream in most other modern capitalist economies (for example, over 75% of all U.K. businesses are family owned). The benefits of family businesses are manifold, genuine, and in many cases psychologically profound.
Consider WIIFF (What's in it for the family). A family business:
1. Creates a heritage for the family and serves as a medium for perpetuating a family's history, traditions, pride, and core values and belief
2. Serves as a powerful testimonial to the success and potency of a family
3.Provides the ultimate career and financial safety net one’s children and grandchildren
4. Offers participating family members greater independence and control of their fate than a more traditional career path
5.Establishes a very special glue (a bonding material, as it were) that can hold a family together around a common set of interests, activities, challenges, opportunities, threats, milestones, relationships, and daily schedules
6. Demonstrates to an entire community (and various sub-communities) that this is a family to be admired and respected
7. Makes it more certain that individual family members will have the fullest opportunities as adults to “stretch“ developmentally and to self-actualize
8.Improves the chances that family members will be able to involve themselves in meaningful philanthropic activities and become pillars of their communities
9 Makes it more likely that financial advantages, non-trivial net worth (a.k.a. wealth), and “security“ will accrue to the family
10. Provides greater stability and welfare for its employees and for the community in which it operates
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Some downsides:
Average life span for an FOB is less than 25 years... which just happens to be the average tenure for a founder.
• Fewer than 33% of FOBs make it to the second generation.
• Only about 15% make it to the third generation and just 3% beyond that.
• By the year 2005, virtually all FOBs will have lost their primary owner to retirement or death.
• Managing growth can be especially challenging in a family firm, and more and more FOBs are turning to psychologists versed not only in psychology but in business consulting "... because the stakes are huge in terms of passing a business along from one generation to the next." – Time, 03.17.2001
•“Successful continuity management is a complex and demanding womb-to-tomb process (literally), which requires great psychological skills and psychological finesse.”
– Mark Brenner, PhD Chairman, TGCP
How can you continue the legacy and make sure that individuals can be their own person and still benefit from the family business and culture? Do you have someone to talk to outside of the family that can help you have an excellent perspective? There are many upsides to a family business as well as complications. Coaching from a Family Therapist can be an excellent way to navigate the different benefits and challenges that are inherent in a family owned business.
