Sunday, April 30, 2017

Why family businesses need to be ever more vigilant ..

In a study of 25,000 publicly listed companies in US from 1950-2009, on an average, they did not last for more than 15 years.

About 30% of family businesses make it through the second generation, 10-15% through the third and 3-5% through the fourth ..

Family owned businesses thus are more promising in the long run over public companies.

The two big traps family businesses often confront are

1. All family members can be accommodated - insist that family members will have tp earn their place in the family business by their education and experience
2. The business cannot grow as fast as the families - if there are enough competent people the business can be scaled up into different areas to accommodate competent people

Reference link :
Link 1  -,  Avoid the traps that can destroy family business, George Stalk Jr, HBR, Jan 2012.

Link 2  - Signs you are losing control of your family business, Josh Baron et al, HBR, April, 2017

Link 3  Why  the 20 th century belongs to family businesses, Josh Baron, HBR, March 2016.

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