Families in Business
• The family members most frequently associated with family businesses regardless of definition are spouses, siblings, children, and parents. In-laws are not often associated with family businesses, but they are more likely to be associated with them than are more distant blood relatives such as cousins, aunts and uncles, or nieces and nephews.
• A spouse is the family member most likely to be a joint owner, a co-manager, and single confidant consulted prior to a critical business decision. Except for ownership, the relative importance of a spouse declines as enterprises become larger.
• After the spouse, sons, brothers, and fathers typically are the family members most frequently involved in family businesses.
• The number of family businesses in the United States varies enormously depending on the definition of “family business” employed. Estimates range from 3 million family businesses when based exclusively on family ownership to somewhat over 1 million when based on family members voluntarily “helping out.” Only businesses that employ people other than the owner(s) qualified for inclusion in the estimates.
• A core of businesses exhibit two or more characteristics often associated with family business. From that core, there are an estimated 2.5 million family businesses in the United States. That estimate includes all employing businesses having two or more family members as owners, and two or more adult family members who actively participate as manager, employee, or as-needed volunteer.
• Approximately 30 percent of small employers have at least one other member of the immediate family who owns a different business, one separate and distinct from the employer’s enterprise and large enough to employ people other than the owner(s). These businesses may or may not involve other family members. The most likely owning relatives are siblings, followed by children, and parents.
• Forty-eight (48) percent of family business owners would like to have a family member eventually take over operation of their venture. The number rises to five in eight among those whose firm employs 20 or more people. However, just 13 percent believe it is “very likely” that a family member actually will take over, though another 23 percent believe it is “likely.” Yet, only 7 percent of all operating businesses were inherited.
• About 9 percent intend to transfer business ownership to one or more family members within the next five years. Those planning the transfer average a little less than 60 years of age.
• Thirty-nine (39) percent say that they originally went into the business with one or more family members. Almost three-quarters of inherited businesses were transferred to more than a single family member.
• Business ownership and operation in the United States tends to run in families. But extensive family ownership apparently does not feeze out others who want to form their own business.
