WASHINGTON, March 14, 2018 /PRNewswire-USNewswire/ — SCORE, the nation’s largest network of volunteer, expert business mentors, has published a new infographic illustrating the major impact that family-owned businesses have on U.S. job creation and economic growth. Family businesses – defined as businesses operated by two or more family members, with majority ownership held within the family – employ 60% of the U.S. workforce and create 78% of all new jobs. Altogether, family-owned businesses generate 64% of the gross domestic product (GDP).
Family owned businesses vary in size and structure:
- Of the 28.8 million small businesses in America, 19% are family-owned.
- Family businesses range in size from a staff of two people (including the owner) to thousands of employees.
- 1.2 million family-owned businesses are run by a married couple.
Family-owned businesses attribute their success to good governance and positive culture:
- Good governance: 94% of family-owned businesses are controlled by supervisory or advisory boards.
- Customer and employee care: 74% of family-owned businesses report having strong values and positive company culture.
- Focus on the next generation: More than 40% of businesses include younger family members on their boards and committees to nurture business and management skills.
Despite their success, many family-owned businesses face serious challenges with succession:
- Only 30% of family businesses survive the transition from first to second-generation ownership.
- Even fewer (12%) of family businesses survive the transition from second to third-generation ownership.
- Ultimately, just 13% of family businesses remain in the family for more than 60 years.
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.