Image a family-owned enterprise. As we speak, your first thought is perhaps Waystar RoyCo, the corporate on the heart of HBO’s Succession. Its founder, Logan Roy, is a self-made however brutal and egotistical patriarch whose youngsters struggle for future management of the corporate. It’s riveting tv, and whereas it’s true that some household firms have drama that ends in bitter household feuds, for the roughly 32.4 million family-owned companies in America, the story is often very totally different.
As an alternative of specializing in the household drama of a fictional firm, it’s best to mirror on the businesses which might be a part of your on a regular basis life, out of your native diner staffed by three generations of 1 household to the worldwide manufacturers you acknowledge which might be managed by multi-generational households, reminiscent of Constancy Investments, Mars, or Chick-fil-A. All of those household companies are the heartbeat of our economic system and contribute meaningfully to our lives.
Eighty-seven % of American companies are family-owned or managed. They signify 54% of U.S. GDP and 59% of employment, that means family-owned companies straight have an effect on greater than half of U.S. employees. They’re additionally increasing; PWC discovered that 86% of such companies anticipate to see development within the subsequent 12 months as they tackle new purchasers and introduce new merchandise.
These statistics substantiate the central however usually neglected function households play within the capital, enterprise, and societal infrastructure of our nation and the worldwide economic system. Their function and attain go nicely past financial output and employment. In rural areas, it’s household firms that present native incomes, generate native wealth, and join communities to the bigger economic system. What’s extra, family-based companies perceive the significance of giving again. Along with their philanthropy, they usually play a vital management function in group tasks and civic associations.
The entrepreneurial economic system is pushed by households. The overwhelming majority of firms are began within the dwelling, by folks following their desires of self-employment and in search of management of their very own destinies. Household companies are sometimes drivers of the American Dream: An MIT research that discovered immigrant households are extra possible to begin a enterprise than native-born People and make use of extra employees than firms began by these born right here. Creating a non-public enterprise turns these coming into the nation into job creators, setting in movement a sustainable future for his or her households and communities.
Whereas the caricatures that Succession perpetuates about household companies aren’t precisely correct, it may certainly be tough to maintain and develop multi-generational firms.
Succession presents challenges which might be distinctive to each household, chief amongst which is navigating household relationships. If households dream of getting their firm and wealth creation proceed throughout generations, the primary technology should start laying that basis early within the lifetime of a enterprise, and in the event that they haven’t, the present technology should begin the work as quickly as attainable. Succession planning shouldn’t be an end-of-life endeavor, however fairly, a business-building endeavor. Generational success requires investing in each the enterprise and the household relationships to make sure that a brand new set of members of the family are ready to proceed development–and are unified on technique.
I prefer to name these growth-minded households who wish to create generational wealth “enterprising households.” An enterprising household doesn’t simply concentrate on the continuity of a specific enterprise to maintain their way of life (although that may be a nice final result). They search for methods and partnerships to speed up the expansion of their companies and of their wealth creation, which in flip, will hopefully strengthen bonds inside the household unit.
If you consider a family-owned enterprise, don’t cease at Waystar RoyCo. Image the impression all household companies, massive and small, have on each the economic system and our communities. Image the success every of those firms brings to these round it.
By making certain family-owned companies can proceed to thrive at present, we assure that much more are attainable tomorrow.
Andy Unanue is the founder and managing accomplice of AUA Personal Fairness Companions.
The opinions expressed in Fortune.com commentary items are solely the views of their authors and don’t essentially mirror the opinions and beliefs of Fortune.
