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5 Lessons from the Family Farm: Why Family Businesses Perform Better

If the family is the backbone of our society, the family business is the heart of our economy. With 89% of all businesses in the U.S. being family controlled, chances are pretty high your business is a family affair, too.
Congratulations. Because we’ve got news for you:

Family businesses perform better.

Walmart, Nike, Facebook, L’Oreal, Volkswagen, BMW or Novartis: These are some of the most prominent examples of family controlled businesses in the world. The mom-and-pop store around the corner, the Italian restaurant or the family farm are the more common ones.

Economic research on the family-owned business has only begun in recent years, but the findings are impressive. In general, family businesses are more successful. All over the world, they perform better than corporate businesses. According to the Boston Consulting Group, they account for more than 30% of all companies worldwide with sales of more than $1 billion. Not to bad, is it? But why is that?

5 Lessons to learn from the Family Farm

Family businesses perform better

We can all learn from the family farm. (Photo by luckybusiness |

A family business is per definition run by family members. For stock-listed companies, family businesses are those where more than 20% of the voting shares belong to the family – where, in short, family members make decisions. Every family is one of a kind – and every business is different. Still: there are some things that family businesses have in common.

A family is a very special structure, and a family business even more so. What exactly makes it different from your regular corporation? And why is it more successful? Let’s find out.

1. A family business is more resilient

Overall, they are more resilient and financially stable, especially in times of crises. Why? Because business decisions have a direct impact on their family, owners tend to make more sustainable, long-term decisions than a corporate business, where the suits may seem interchangeable at times.

The downside: In a family business, business is always personal. Using tools for professional business intelligence can help to get some distance and avoid making emotional decisions.

2. A family business is more agile

Family-owned businesses are generally very agile in terms of innovation: **New ideas can be discussed at breakfast, prototypes developed over dinner. **

A family business trains staff since kindergarten

A family business is more agile. (Photo by Minerva Studio |

Communication between family members is straightforward and honest – there is no need for prolonged project meetings and out-of-control task managers.

The downside: Projects and innovation might end up being disruptive and chaotic. Even the most agile environments need some control – and smart project management.

3. A family business more efficient

Short decision-making paths are a big plus of family owned businesses, and usually responsibilities are pretty clear. Dad takes care of the cattle, mom runs the garden and the accounts, and the kids are part of the team. Everyone knows what to do – and how to do it.

The downside: Quick decision-making and clear responsibilities are all great – unless, of course, there is personal conflict involved. Mom might not like it when Dad wants to take care of the accounts; a sulking teenager might make for a grumpy worker. Assigning tasks and defining goals can help keeping the boundaries between the professional and personal.

4. A family business is a fair employer

Fairness is a big issue in a family-run business. Family businesses are pretty hands-on: Unlike some CEO stepping in, the owner knows each and every part of his business from experience. This leads to more respect and trust – and in the end, employees become something like family.

The downside: Employees might become too loyal to the business for their own good. Contemporary time tracking is a very good tool to avoid excessive overtime and burnouts – especially in a trust-based business culture.

5. A family business trains the staff since kindergarten

Photo by Monkey Business |

Training the kids on-site in a family business. (Photo by Monkey Business |

Growing up with a family that runs a business means growing up in the business, too. Playing in the shop, doing the homework in the pizzeria, or visiting the factory on Saturdays: Just by being there, children get trained for business. Without anyone really meaning to, the kids learn how to do the work – and, in the end, take over the business.

The downside: When the kids are taking over, they might want to change things – and sometimes, the parents don’t like that. Generational conflict is a very common problem for family businesses**.** Planning far ahead and implementing changes step by step can help with that; as well as allowing the kids to learn from failure – just as you did.

A family-owned business is here to stay

It’s a statistical fact: Family businesses generally do well and think long-term. But there are downsides to everything; there are those who fail at combining business and family. It’s not easy to keep a professional relationship with a family member. Love, personal hurt and professional pride might interfere with making business decisions. In the corporate world, emotions and business don’t go together; in a family business, they have to. Which is good - because emotions are what makes us human. Once you’ve learned to combine the two, you’ll grow incredibly strong - as a person and as a business.

A good family business is here to stay. Because families last for generations.

May your business last that long too! Let us help you with that.


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