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Family Business Facts and Stats

 

Family-owned businesses are a vital part of not just the state of Iowa's economy, but the nation's economy as well. Below are some interesting and important facts and stats to take into account.

 

FAMILY BUSINESSES ARE ON THE RISE

  • A growing number of family-owned businesses in emerging markets/regions could hit $1 billion in sales from 2010 to 2025. (McKinsey 2015)
  • Businesses owned by families and founders in emerging markets- some 60 leading companies in Asia, Central America, and South America, with more than 100,000 survey respondents- had health outcomes better than other companies in the same markets. (McKinsey 2015)
  • Over one-third (34%) of family businesses are targeting growth rates in double digits (over 10%) compared to one-quarter (26%) of non-family businesses. (EY Global 2018)
  • Family-owned businesses account for an estimated 80% of companies worldwide and are the largest source of long-term employment in most countries. (Harvard Business Review 2015)
  • Family businesses contribute 54% of private sector GDP, or 7.7 trillion USD and are responsible for employing 59% of private sector workforce, or 83.3 million jobs. (Astrachan 2021)

OPPORTUNITIES FOR WOMEN IN FAMILY BUSINESS

  • 9% of family businesses are helmed by a woman (compared to 3% in the rest of the cohort) and 24% of executive leadership is female. Leaders of family business acknowledge they have more to do, though, and still put diversity at the top of the recruitment agenda (40% of responses). (EY Global 2018)
  • Women in family businesses are continuing to work on role conflicts to pave their own path in the business and the family and resist being designated only as the family caregiver. (KPMG 2020)
  • As future generations become more involved in the business, family firms’ decisions on succession are increasingly being driven on merit, capability and willingness instead of gender or kinship. (KPMG 2020)
  • In 2019, none of the S&P 500 list of companies reported a male-only board. And women’s share of S&P 500 board seats reached a new high of 28% in the spring of 2020. (KPMG 2020)

CHALLENGES FACING FAMILY BUSINESSES

  • Less than a third of family-owned business directors (vs. 49% of non-family business directors) said that a diverse representation on their board was a priority. (Harvard Business Review 2014)
  • Family-owned business directors said their boards lacked Succession Planning, Strategy, Financial-Audit, and Compensation skills to a greater extent than did non-family business directors. (Harvard Business Review 2014)
  • Family-owned business boards measured their own performance through regular, annual assessments less frequently than did non-family business boards (45% vs. 67%, respectively). (Harvard Business Review 2014)

FAMILY BUSINESS AND THE GLOBAL ECONOMY

  • Family-owned businesses have a larger presence in some emerging economies, like China, India, Latin America, and Southeast Asia for instance, where they account for roughly 40% of total revenues. (Mckinsey 2016)
  • Family-owned businesses account for 80% of the brand value of the world’s most valuable labels. (Mckinsey 2016)
  • A majority of the world’s wealth is created by family-owned businesses. Businesses owned by a single family’s members contribute to 70% to 90% of the world’s GDP. (GVSU Family Owned Business Institute, 2021)
  • 58% of small-to-medium enterprises are looking to emerging markets to sell goods, 11% to manufacture & 12% to purchase from them. (Tharawat Magazine 2014)