Imagine a family business. Today, your first thought might be Waystar RoyCo, the company at the center of HBO’s Succession. Its founder, Logan Roy, is a self-made yet brutal and arrogant patriarch whose sons struggle to gain control of the company in the future. It’s eye-catching TV, and while it’s true that some family businesses have dramas that end in bitter family feuds, for the approximately 32.4 million family-owned businesses in America, the story is usually a very different one.
Instead of focusing on the family drama of a fictional company, you should think about the companies that are part of your daily life, from your local restaurant staffed by three generations of one family to perceptive global brands controlled by multigenerational families, such as Fidelity Investments or Mars or Chick-fil-A. All of these family businesses are the beating heart of our economy and make meaningful contributions to our lives.
Eighty-seven percent of American businesses are family-owned or controlled. They account for 54% of US GDP and 59% of employment, which means that family-owned businesses directly influence more than half of all workers in the US. they also expand; Found PWC That 86% of these companies expect to see growth in the next year because they receive new customers and introduce new products.
These statistics support the central, yet often overlooked, role that families play in the capital, business, and societal infrastructure of our country and the global economy. Their role and scope extend beyond economic production and employment. In rural areas, it is family businesses that provide local income, generate local wealth, and connect communities to the larger economy. Moreover, family businesses understand the importance of giving back. In addition to their charitable work, they often play a critical leadership role in community projects and civic associations.
The entrepreneurial economy is driven by families. The vast majority of businesses are started at home, by people who follow their dreams of self-employment and seek to control their own destinies. Family businesses are often the drivers of the American Dream: An MIT study found that immigrant families are in more likeable To start a business more Americans are born in the United States and to hire more workers than companies set up by those born here. Creating a private company turns those who enter the country into job creators, leading to a sustainable future for their families and communities.
While the cartoons Succession Perpetuating family businesses isn’t entirely accurate, as multigenerational businesses can actually be difficult to maintain and grow.
Succession presents unique challenges to each family, chief among them being the management of family relationships. If families dream of continuing to create their company and its wealth through generations, then the first generation should start laying that foundation early in the life of the company, and if they don’t, then the current generation should start working as early as possible. Succession planning is not an end-of-life endeavor, but rather a business-building endeavor. Generational success requires investment in each business And Family relationships to ensure that a new group of family members is ready to continue growing – and united in strategy.
I like to call these growth minded families who want to create wealth for generations “Entrepreneur Families”. The enterprising family doesn’t just focus on continuing a particular business to maintain their way of life (although that’s a pretty cool result). They are looking for strategies and partnerships to accelerate their business growth and wealth creation, which in turn will hopefully strengthen bonds within the family unit.
When you think of a family-owned business, don’t stop at Waystar RoyCo. Imagine the impact of all family businesses, large and small, on the economy and our communities. Imagine the success each of these companies brings to those around them.
By ensuring that family-owned businesses continue to thrive today, we ensure that more business can see the light of day tomorrow.
Andy Unanue is the founder and managing partner of AUA Private Equity Partners.
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