Do Family Businesses Have a Competitive Advantage?

Do family businesses have a competitive advantageNumerous studies conducted over the years have found that family businesses have a competitive advantage over non-family-owned companies.

So what characteristics do family-owned business possess that give them an edge over their non-family counterparts?

A few of the key aspects from these studies and surveys are as follows:

  1. Teamwork. Well-functioning families are a natural team. Their goals and values are often in alignment, giving them the ability to make decisions faster and adapt to sudden changes more quickly.
  2. Innovation. Family businesses are viewed as having more of an opportunity to reinvent their business as each generation comes into leadership.
  3. Trust. The general public tends to view family businesses as more trustworthy. Also, employees of a family business tend to trust the owners more than their non-family counterparts.
  4. Sustainability. With family legacy as an ongoing motive, these businesses are often more prudent about their decision making and are more focused on long-term goals.

Of course, a family business ripe with conflict is likely to be at more of a disadvantage than its non-family peers. So it begs the question – do family-owned businesses really have an advantage over non-family companies? I’ve decided this topic requires some additional research of my own – so stay tuned!

 

Steven E. Staugaitis, Kreischer MillerSteven E. Staugaitis is a director at Kreischer Miller and a specialist for the Center for Private Company Excellence. Contact him at Email.

 

 

What do you think? Do family businesses have an advantage? Share in the comments.

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