Family businesses are an integral part of the US economy. Any company with two or more family members in leadership roles, in which the family retains majority ownership or control, is classed as a family business. Some employ just a handful of people; others employ thousands. Below are some of the key statistics on family-owned businesses and their place in the US economy.
Most-quoted statistics
- 60% of the US workforce is employed by a family-owned business.
- Family-owned businesses are responsible for creating 78% of all new jobs in the US.
- Only 30% of family-owned businesses survive into the second generation, and just 12% make it to the third.
- 47% of family business owners plan to retire within five years but have no succession plan in place.
- Family businesses contribute more than half (57%) of total US GDP.
- Just under 20% (19.3%) of US firms are family-owned.
- Among family firms that reported annual growth above 10% in 2018, more than 80% also reported a clear sense of purpose and agreed-upon values.
- Almost three-quarters (74%) of family businesses report a strong sense of culture and values.
The charts above are drawn from an embedded Microsoft Office presentation, powered by Office.
Women in family businesses
- 24% of family businesses are led by a woman holding the title of president or CEO.
- More than a third (31.3%) of family businesses have designated a woman as their successor.
- Just under 60% of family-owned businesses have women in top management positions.
- The number of family businesses owned by women rose by 37% over the previous five years.
- Female-owned family businesses tend to be younger than their male-owned counterparts, by about ten years on average.
- Most female-owned family businesses report high levels of family loyalty and alignment on key issues such as long-term goals, ethos and pride in the business.
- Family businesses owned by women report an attrition rate 40% lower than those owned by men.
Future challenges for family businesses
- 40.3% of family business owners plan to retire at some point, yet fewer than half of those retiring within five years have a clear succession plan, and many have none at all.
- 43% of all family-owned businesses lack a succession plan, regardless of their future plans.
- As many as 70% of owners surveyed say they would like to pass the business to the next generation, but only 30% succeed in making that transition.
- More than half (60%) of family businesses believe they hold themselves to higher ethical standards than their competitors, and the same share say they regularly discuss ethics with management, employees and customers.
Related: Gig economy statistics