As a member of a fourth-generation family firm, I can attest to the challenges, benefits, and on-going trends that besiege family businesses. The biggest difference felt by businesses run by families is the intimacy that is shared amongst those who are involved, which is reflected in these trends. Despite the range of business types and industries, family businesses are as tightly interwoven as the threads of a fine silk fabric. Consider the following trends as they relate to your experience:
- Family businesses are everywhere. Family businesses are a vital, distinct form of business in the vast majority of countries around the world and make up most of the business types in first world countries and others, with family firms representing 80 percent of all firms in the United States, 85 percent of all firms in the European Union, 90 percent of companies in the Middle East, and 99 percent in Japan, to name a handful.
- Succession is often the biggest struggle. Despite the prevalence of family-run businesses, only 30% of these family-owned businesses survive a transitional phase, with a mere 3-4% making it to the third and fourth generation. It has been observed that 70% of the family inheritance is lost by the 2nd generation and 90% by the 4th.
- Interruptions are inevitable and personal. Interruptions within a business are as much a part of life as breathing and blinking—they are viewed by some as hiccups, challenges, or even crises. They are, quite simply, a change in the entrepreneurial experiences of both individuals and within the business itself, and one must be ready to accept and even embrace such changes as they come. What makes interruptions in family businesses unique is the personal nature of those interruptions and the kind of direct impact they can have on the organization. Marriages, births, death, education, inter-family conflict, etc., normal aspects of life that are experienced by all, are integrally connected to the business. This can often introduce a different set of challenges and dynamics than experienced by other corporations.
My book, Interrupted Entrepreneurship, has the guidance needed to combat these trends. In it, I address the top concerns and questions that family businesses face. The book provides insightful advice garnered from real-life stories from across the world, including my own multi-generational family business. Get your copy here.