Family-owned businesses account for what percentage of the nations employment?

Looking towards the future, 47% of family business owners report that they expect to retire in the next five years, but do not have a succession plan.

Download the infographic for more information on the successes and challenges of family-owned businesses in the U.S.

About SCORE

Since 1964, SCORE has helped more than 10 million aspiring entrepreneurs. Each year, SCORE's 10,000 volunteer business experts provide 450,000+ free small business mentoring sessions, workshops and educational services to clients in 300 chapters nationwide. In 2017, SCORE volunteers provided 3.6+ million hours to help create more than 54,000 small businesses and 116,000 full-time, part-time, owner and contractor jobs.

For more information about starting or operating a small business, visit SCORE at www.score.org. Follow @SCOREMentors on Facebook and Twitter for the latest small business news and updates.

Family-owned businesses are economic powerhouses that drive local, national, and global economies. Here are some statistics:

America's Economic Engine

• Family businesses account for 64 percent of U.S. gross domestic product, generate 62 percent of the country's employment, and account for 78 percent of all new job creation.1
• Family-owned businesses are the backbone of the American economy. Studies have shown about 35 percent of Fortune 500 companies are family-controlled and represent the full spectrum of American companies from small business to major corporations.2
• The greatest part of America's wealth lies with family-owned businesses. According to the US Census Bureau, family firms comprise 90 percent of all business enterprises in North America.3
• Roughly 90 percent of the families responding to a survey in "From Longevity of Firms to Trans-generational Entrepreneurship of Families: Introducing Family Entrepreneurial Orientation indicated that they control more than a single firm. The results of the survey suggest that there is strong entrepreneurial activity undertaken by controlling families beyond their core (i.e., largest) company.4
• Small businesses, including many family firms, employ just over half of US workers. Of 113.4 million non-farm private sector workers in 2011, small firms with fewer than 500 workers employed 55 million and large firms employed 58.4 million. Firms with fewer than 20 employees employed 20.2 million.5
• Research shows that family businesses are less likely to lay off employees regardless of financial performance.6

Family Businesses Have Longevity

• Recent research has shown that continued family control can be efficient, since families are, for example, able to positively affect the resource inventory and usage of their firms, apply a long-term perspective allowing for unique strategic positioning, have less human resources problems and higher firm values, or drive new entrepreneurial activity.7
• What truly drives many family businesses is the sense of connection and identity the owners and their family members feel with the business.8
• The mean age of family control in the family's core company is 60.2 years.9
• More than 30% of all family-owned businesses make the transition into the second generation. 12% will still be viable into the third generation, with only 3% of all family businesses operating at the fourth-generation level and  beyond.10 
• Recent research indicates, however, that the first transition has changed to 19% in the last 5 years. This is thought to be due to Millenials not wanting to take over the traditional family business, but perhaps selling and using the proceeds to start a different, but still family controlled, enterprise.10a 
• The tenure of leadership in a Family Enterprise is four to five times longer than their counterparts.11
• Of primary importance among family firm wealth holders is transferring not only their financial wealth but also their values surrounding their wealth to subsequent generations. Primary values taught include encouraging children to earn their own money, philanthropy, charitable giving and volunteering.12
• The environment for innovation in family businesses improves when more generations of the owning family are actively involved in the business.13
• Family businesses retain talent better than their competitors do: only 9 percent of family businesses work forces turned over annually (versus 11 percent at non-family firms), in a Harvard Business Review study. They create a culture of commitment and purpose, avoiding layoffs during downturns, promoting from within and investing in people.14

Central Ohio has family business longevity. Meet Conway Center members from Accelerated Laboratory Logistics who recently celebrated 100 years in business. Accelerated Laboratory Logistics is recognized as the leader in providing world class laboratory relocations in the U.S.

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