Family owned businesses resourceful. ROA is greater in family
businesses, averaging a 6.65% greater return than non-family firms.
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.
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)
Produced by the Mihaylo College of Business and Economics at California State University, Fullerton.
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