Family-owned and operated businesses are a core pillar in both local communities and the economy. These businesses offer a range of benefits that give them an essential place in our lives. In fact, nearly 1 in 3 small businesses are family-owned, and account for 62% of employment in the United States. Family-owned businesses also often employ multiple generations of family members and prioritize maintaining family connections as an important part of their business strategy. Family-owned businesses also tend to form mutually beneficial relationships within their communities, which results in more investment back into these communities and brand loyalty with recurring customers for the business.
Competitive Advantages of Family-Owned Businesses
Family-owned businesses succeed for a variety of factors. Some of the world’s largest family-run businesses are Walmart (United States), Volkswagen Group (Germany), Samsung Group (Korea) and Tata Group (India). In fact, there are key competitive advantages that family-owned businesses have over other types of businesses, including authenticity, community involvement, and multi-generational perspectives.
Authenticity Drives Loyalty
One of the most significant competitive advantages of family-owned businesses has been their authenticity. Authenticity is a quality that many corporations struggle to achieve. Unlike other types of businesses, family-owned businesses are often rooted in family history and tradition, and this family connection is an important part of their brand, particularly for the customers they serve.
In fact, 64% of one study’s respondents said that they trusted family businesses more than privately held or publicly traded companies. Family-owned businesses are seen as more genuine and personable with their customers and tend to build stronger customer loyalty and have higher rates of repeat business.
The Local Love
Family-owned businesses often have deep roots and connections to the local community. Many family-owned businesses are also locally owned, which means they have more invested in the success and well-being of the community. This connection is especially important at a time when many corporations are facing criticism for focusing on the bottom line and outsourcing jobs to other countries.
By contrast, small and family-owned businesses tend to focus more on mutual support, and often engage in social responsibility activities. In fact, 93% of family-owned businesses include some type of community service in their regular operations. In return, loyal customers are more willing to support these businesses.
Younger consumers, Gen Z, are more likely to purchase from local businesses than large corporations. Young adult customers are eager to support businesses that offer personalized customer service, niche brands and products, and entrepreneurially minded thinkers and doers.
Multi-Generational Perspectives Maintain a Competitive Edge
Family-owned businesses also offer unique multi-generational perspectives that can be a significant competitive advantage. It is a well-known problem that companies tend to lose their competitive edge when they lose touch with younger generations. But family businesses that employ multiple generations often avoid this issue and maintain their edge thanks to diverse perspectives.
Studies have shown that family-owned businesses are 42% more likely to implement a transformational strategy to stay relevant than non-family firms. At the same time, the technical skills and insight from older family members contribute to the business’s longevity in valuable ways.
When the strengths of multiple generations commit to a common goal of success, a family-owned business can experience both success and longevity using the unique talents that each person in the family contributes. When joined together, these multi-generational perspectives enable many family businesses to expand, innovate, and stay competitive.
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Deegan Roofing can perform an inspection of your roof and repair any damage. We are family-owned and operated, Deegan Roofing Company has been installing and servicing residential and commercial roofing customers in the New Jersey area for over 30 years. Website https://www.deeganroofing.com/ Address: 345 Terrill Rd, Scotch Plains, NJ 07076 Hours: Open 8:30 AM ⋅ Closes 5:30 PM