Around 75% of businesses in the world are family businesses, ranging from single small businesses to large multinational organizations. They make substantial contributions to the economies where they operate. In the UAE this figure is closer to 90%.- Family Businesses exhibit several strengths that often make them outperform non-family businesses on sales and profit growth. These strengths include high levels of commitment and loyalty, accumulation of business and market knowledge, resilience and fast decision-making.
- Owner families play three simultaneous roles in the business: as family members, as owners and as managers. The overlap of these roles tends to create tensions and conflicts that increase as the number of family members increases. These conflicts are almost universal and can have detrimental effects on the business.
- Family businesses evolve through five stages of ownership, with increasing complexity: Founder Owner, Parent Offspring Partnership, Sibling Partnership, Cousin Consortium, Distant Family. This is accompanied by an increase in the number of family members and the complexity of defining who is family; not to mention the complexity of successfully organizing the relationships across the three systems of ownership, family and business.
- Survival rates of family businesses into the second and third generations are described as quite low, being in the ranges of 30% and 13%, respectively; and impacted by factors such as market and industry changes, family conflict, lack of strategic planning, and succession problems.