Keeping business within the family is coming back into style and has a positive image in the public’s view.
There are many big brands that have stayed with their families, including Carnival, Phillips 66, and Nike. Even smaller businesses are charming when they are operated by a family.
The 20th-century image of the working family man is still prevalent with the modern consumer. Companies that have deep-rooted family values are images that inspire both consumers and potential employees to have brand loyalty. According to research by the Harvard Business Review, family-owned businesses have higher employee retention and closer employee relationships.
Safer Spending Habits
Family-owned businesses have also shown to keep their finances in check. Since the company’s money is also the family’s money, spending habits will be safer and logical so that it does not take away from the family. The investments of family-owned companies have also shifted towards quality instead of quality, as claimed in an analysis by Virgin.com.
A Face To The Brand
Since most corporations are hidden behind their corporate structure and a wealthy CEO, keeping the brand name behind a family may be more relatable to the common person. Instead of a board of director, there are Mom, Dad, brothers, sisters, and maybe some distant cousins. It removes the untrustworthy, corporate feel to the brand name and keeps it simple.
Statistics Prove It
It is more than just speculation to say that the average consumer prefers a family-owned business. According to a market study by EY, 60% of buyers claim to prefer to purchase products from family-owned corporations. The attitude is especially prevalent in developing countries, where a family’s legacy has great importance within their cultures. The study also showed that 76 percent of companies will prefer to refer to themselves as family-owned whenever applicable to build trust with the public.
More Freedom To Take Risks
When one’s business is shared with trusted family members, there is more financial security to explore and take risks. Risk-taking can reap big rewards, but many private businesses will want to stick to safe industry standards that will guarantee profits or please shareholders. Since the safer route typically will have lower margins of profit, high-risk ventures that are successful will come out ahead and be innovative.
Family-owned businesses are simply more sustainable and appealing to the average consumer. They are still susceptible to the same market risks, like globalization, but there are better investment returns overall. There is now more incentive than ever to keep your business within the family or transform and re-brand your private business into a family one.