While the term “family business” may still bring to mind the little Mom and Pop store on the corner, the reality is that family businesses make up a huge segment of the economy, in the United States and worldwide.
Earlier this year, The Center for Family Business at the University of St. Gallen produced the Global Family Business Index, which lists the 500 largest family-owned businesses worldwide. With huge names like Wal-Mart, Ford Motor Company, and Berkshire Hathaway included, it’s not surprising to find that the combined annual revenue of these 500 firms is over $6.5 trillion!
In other words, these 500 family-owned businesses represent the third largest economy in the world behind the U.S. and China!
In nearly all these cases, these are long-established corporate behemoths in which the founding family has maintained a majority stake in the company and decision-making rights in company policy and leadership. The average age of these companies is 88 years, so several generations have already been involved.
