In America, family owned businesses are the backbone of our economy. And they’re successful.
35% of Fortune 500 companies are family owned. Wal-Mart, the world’s largest retailer, was founded by two brothers, Sam and Bud.
There are many reasons why working with your family and close friends can be an advantage:
1. You work with people you trust.
Lisa Hladish, founder of Paper Daisies says, “There is a trust level I cannot expect or get from non-family members”. This is why Lisa relies on her entire family to help run her growing stationary business.
Brett Berish of Luc Belaire agrees – “The main thing is trust. It’s a huge factor. It’s not trusting that they won’t take something, it’s trust that they’ll get the job done.”
It’s important to trust those you are giving control to. It’s not just a business; it’s your baby, and you wouldn’t leave your baby in the hands of just anyone.
2. Your friends and family have a vested interest in the company.
In a family business, your employees aren’t just working for a corporation, they are working to carry on the family tradition and contribute to the family legacy. Matt Allen knows all about the importance of tradition. He and his brother are owners of Taylor’s Bakery, a family-owned and operated bakery that will celebrate 103 years in February.
He said, “There is a great amount of happiness from being able to continue a business and has had 4 generations of family ownership. The sense of pride is a driving factor.”
3. Shared Core Values
Lisa Hladish worked with her family to create a vision for their business. She included everyone in the process, which helped focus the team on wanting the same thing. Lisa shared “It is everyone’s mission to accomplish this shared vision.”
Kev Onell, founder of 29 Studios tweeted that his wife and he started their entrepreneurial business 27 years ago with 4 core values. “Love what we do”, “Travel Often”, “Help Others”, and “Innovate like crazy.” It’s worked and has kept their business going strong. Kev is continuing the “work with family tradition” by bringing on his daughter as Business Development Director at the age of 23.
4. Family-Owned Businesses Have a Long Term Perspective.
“Family business leaders focus on the next generation, not the next quarter. They tend to embrace strategies that put customers and employees first and emphasize social responsibility,” according to an article by Harvard Business Review.
After Luc Belaire’s success, they wanted to give back. As part of their mission, they created #BelaireBacked to complete funding on kickstarter campaigns. It’s their way of sharing a belief in startups and family-focused businesses.
Mahelia de Randamie is also on a mission to give back. She tweeted, “Working with friends is a good idea. The key here is to have friends who share the same perspective, common goal. In my case, it’s to be a positive force in the local community”.
Mahelia went on to share that because she and her friends dream of a better world, they support one another with their work and assist each other to uplift and inspire while being of service.
5. Greater Job Security
If you’re in the family, or a very close friend working in a family-owned business, it stands to reason you can feel fairly confident about your job security.
Firing someone close leads to stress outside of the company walls and it’s usually avoided if possible.
Research by the US Department of Commerce, Bureau of Census shows that family businesses are less likely to lay off employees regardless of financial performance. This allows employees to relax and not stress about job security during economic uncertainty.
6. Better and More Flexible Working Conditions.
In a poll conducted by TNS Custom Research, respondents reported one advantage of working in a family-owned business is their tendency to provide better and more flexible working conditions.
If your child is sick and you can’t go in to work, calling your manager, who also happens to be your child’s grandfather, isn’t going to be nearly as difficult as it might be in an environment where strangers who don’t have empathy for your situation are recording your attendance.
It also benefits the business to have family help. Lisa Hladish had a stationary order that needed to be filled right away. She and her brother stayed up past midnight to get it done. She said she wouldn’t have been comfortable asking a non-family member to do that.
7. Greater Loyalty.
A family member makes up in loyalty what they lack in skills. They are willing to work longer hours or provide added service for a customer because it reflects better on them as a member of the “family owned business.”
Family members are less likely to leave you and go to work for someone else. They realize if they leave the job, even if they may make more money, they can’t leave the relationship. Family loyalty keeps generations working together year after year.
The oldest family owned business operating in the U.S. is the Zildjian Cymbal Co. Founded in 1623, they have successfully passed down the business to Zildjian heirs for fifteen generations.
8. You Know What You’re Getting.
Hiring non-family employees provides you with needed assistance, but it can cause unexpected headaches. With family, you know the person, their personality and their needs. You generally know what they’re like under stress (like at the office), and away from it.
When speaking with Brett Berish of Luc Belaire Wine and Spirits, he added that looking back over the last 15 years when he and his brother started the business, he saw how hard his brother worked. He said, “I didn’t have to question anything. I knew his devotion. My brother works harder than me – but he’d probably say the same thing about me.”
9. Family Businesses Raise Entrepreneurs
According to a study by the Family Firm Institute, within the S&P 500 companies, ROI is greater in family businesses. This is due in large part to the entrepreneurial activity that is exhibited over time by many family-owned businesses. Of the 222 owners surveyed, families on average controlled 6.1 firms, created 5.4 firms, added 2.7 firms through merger activity, and spun off 1.5 firms.
Brett Berish, President & CEO of Luc Belaire says, “We believe in the power of a great idea and we’re excited to support creative projects and the people behind them who are determined to make their dreams a reality. We’ve been there too!”
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.