The 32.4 million family businesses in the United States play a major role in the overall business economy and employ approximately 59 percent of the American workforce, according to the nonprofit Family Enterprise USA. Even more exciting, a recent report by PwC shows that last year marked the largest growth increase for family businesses in 15 years.
Alongside this notable growth, the report also identifies key areas where family businesses can seize even more opportunity. Here are the top three:
1. Strengthen digital capabilities.
Digital capabilities can be transformative for family businesses. According to the report, almost 10 percent more family businesses with strong digital capabilities had double-digit growth in the last year. But the report shows that only 42 percent of family businesses believe they have strong digital capabilities.
2. Ensure board diversity.
Family businesses that have embraced digital transformation also tend to have more diversity on their boards, according to the report — a characteristic that gave these businesses a slight advantage in double-digit growth this year. Yet only 9 percent of businesses surveyed said they have a diverse board. (The report defined diverse boards as having “two or more women, one board member under the age of 40, one non-family member and one from a different sector background.”) Over one-third had only family members on their board.
3. Focus on Key Strategies,
Environmental, social and governance (ESG) factors can be critical for building strong customer relationships. “Family businesses with a communicated ESG strategy are more trusted by customers,” the PwC press release stated.
Yet, 67 percent of family businesses put little to no focus on ESG. Just 19 percent say that minimizing their company’s environmental impact is a priority. Family businesses that do prioritize ESG see clear benefits: 8 percent more businesses with ESG strategies experience double-digit growth, according to the PwC report.
“Family businesses are showing they can grow by welcoming change and building trust with digital communication and diverse boards— even in a challenging landscape,” reported Peter Englisch, PwC Global and EMEA Family Business Leader. “To continue this trajectory, firms will need to re-orient to focus on delivering value not just for customers, but for society. Transformation, purpose, and legacy are no longer converse, but intertwined.”
In this edition of the MBA Business Magazine, we’ll highlight some of the many family businesses that are Association members. One of the most successful is this month’s feature — Ron Jones Hardwood Sales Inc., a third-generation, family owned business that is marking its 40th anniversary in 2023.
We’ll also hear from Riley Warren, a fifth- generation family member of The Warren Company on what it means to celebrate 110 years in business this year. Plus, don’t miss the fascinating profile on Meadville- based Channellock, which is also on its fifth generation of family ownership and operation.
Be sure to read our expert articles on the importance of succession planning and the value of computer training for family businesses to be successful today. And, speaking of training, check out this month’s Training Catalog featuring all the upcoming computer, HR and professional development courses available at the MBA, or visit mbausa.org to learn more!
