UConn Family Business Program - Fast Facts about Family Firms

Helping family businesses achieve harmony and success.

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The greatest part of America's wealth lies with family-owned businesses. Family firms comprise 80% to 90% of all business enterprises in North America. (J.H. Astrachan and M.C. Shanker, "Family Businesses' Contribution to the U.S. Economy: A Closer Look," Family Business Review, September 2003)

IFOBs contribute 64% of the GDP or $5,907 billion ($5+ trillion) and employ 62% of the U.S. workforce. (J.H. Astrachan and M.C. Shanker, "Family Businesses' Contribution to the U.S. Economy: A Closer Look," Family Business Review, September 2003)

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)

The leadership of 39% of family-owned businesses will have changed hands in the next five years. (Raymond Institute/MassMutual, American Family Business Survey, 2003)

34% of family firms expect the next CEO to be a woman; 52% of participants hire at least one female family member full time, while 10% employ two female family members of the same status. Of CEOs due to retire within five years aged 61 or older, 55% have not yet chosen their replacement. (Raymond Institute/MassMutual, American Family Business Survey, 2003)

19% of family business participants have not completed any estate planning other than writing a will; only 37% have written a strategic plan; and over 60% are very positive about their company's future. (Raymond Institute/MassMutual, American Family Business Survey, 2003)

85% of family-owned firms that have identified a successor say it will be a family member. (Raymond Institute/MassMutual, American Family Business Survey, 2003) In a study of S&P 500 firms (Anderson and Reeb, 2003):

33.6% are family businesses in which the founding family has, on average, 18% of firm equity.
Family firm capital structure is the same.
Family firm performance is greater and EVA is 5.5% greater ($118.6 million on average) when founding families maintain an ownership stake.
Young family firms and old family firms (50-year-old threshold) outperform non-family firms.
ROA is greater in family businesses, with a 6.65% greater return than non-family firms.
Families own for an average of 78 years.
Family firm CEOs earn on average nearly 10% less than their non-family counterparts.

The oldest FOB operating in the United States is the Zildjian Cymbal Co. of Norwood, MA. Founded in 1623 in Constantinople and moved with the family to the United States in 1929. (Family Business Magazine, Spring 2001)

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. (Wealth with Responsibility Study/2000, Bankers Trust Private Banking, Deutsche Bank Group)

Source: Family Firm Institute