Who doesn’t love a good fact? Here are some fun and interesting family business facts for you to enjoy! (Originally collected by BBCPA.com)
The most trusted advisors for family businesses include: 1.) Spouse; 2.) Accountant; 3.) Lawyer; 4.) Parent; 5.) Business Peer; 6.) Financial advisor.
Forty three percent of respondents indicated they don’t have a plan or do not know if they have a plan to deal with estate taxes.
More than 30% of all family-owned businesses survive into the second generation. Twelve percent will still be viable into the third generation, with 3% of all family businesses operating at the fourth-generation level and beyond.
-Joseph Astrachan, Ph.D., editor, Family Business Review
While 76% of US family business leaders intend to pass ownership to the next generation, one-quarter plan to enlist outside management to oversee the actual running of the company.
90% of owners agree on the importance of exit planning, yet just 33% have a business succession plan.
Most business owners surveyed say they have chosen their successor – in most cases it’s a family member. Over 80% of those who have chosen a successor claim that this individual knows he or she has been chosen.
Only three-fifths of proprietors think they have enough resources to divide assets fairly between all heirs, including relatives who don’t work for the company.
The older a company, the more likely the leadership is to anticipate that the business will remain in the family after a change in ownership; 66% of proprietors running firms that have been trading for more than 50 years plan to pass the wheel to their offspring, compared to just 25% of those running firms that have been trading less than 20 years.
Over two-thirds of business owners believe their successors have as much passion or more passion for the business as they do; survey respondents indicate that person is more often a non-related key employee, as opposed to a family member.
Family Business and The Economy
Nearly all US family businesses are confident about growth in the next five years.
The level of concern over the country’s debt and deficit increases with company longevity: 60% of respondents from businesses with over 100 years of operation ranked it as their number one or two concern.
One-third of all companies in the S&P 500 index are defined as family businesses.
Family-owned businesses account for 90% of all businesses in the U.S. (large and small).
The three major challenges identified by family businesses include tough competition, still-uncertain market conditions, and the challenge of finding skilled workers. The need to continually innovate is a top long-term concern for family businesses.
62% of family businesses haven’t made any provision for dealing with family and business issues, such as if a key manager or shareholder gets seriously sick or dies.
A large amount of family-owned businesses (73%) discuss their issues among stakeholders prior to making a final decision.
Nearly half of surveyed family-run businesses had given thought to putting a plan in place for the possibility of a temporary disability of key workers, but had done nothing.
Between 10% and 15% of U.S. family firms are now managed by non-family executives.
79% of Family Businesses have some sort of mechanism in place to deal with potential conflict, ranging from shareholders’ agreements (49%), entry and exit provisions (28%), and provision for a third party mediator (24%).
About one-third of all family businesses are husband-and-wife teams.
In terms of conflict, forty-four percent of family businesses surveyed said they quarreled about the future direction of the business; 36% about the performance of family members employed within the firm; 31% have disagreed about who should be allowed to work for the business and whether family members who are actively involved in the business are consulting the wider family sufficiently.
Fifteen percent of the family businesses surveyed reported experiencing a divorce. Among those, 44% reported that it had a negative effect on the business.
A strong support network from family members and values and ethics shared between family members were cited by respondents as the most important advantages of the family business model.