Research has shown that family-run businesses are extremely successful. We’ll be looking at the facts and figures of their successes, the business mind-set that gets them there, and ultimately, how to run one.

The facts and the figuresRunning a Family Business

The Credit Suisse Research Institute (CSRI) recently ran a survey on family-owned businesses, and the figures are telling. Currently, businesses operated solely by families are growing at a significantly faster rate than non-family run companies.

In fact, in 2017 alone, the CSRI’s work demonstrated that family-owned establishments in the UK were 34% higher in terms of cash flow returns on investment than their counterparts.

But, there’s more. Earnings (before interest, taxes and depreciation margins) are higher, overall growth is superior, and consequently overall success is larger in these businesses.

However, if that’s not enough proof, there’s even more evidence that family owned companies are performing extremely well. Investments are more likely to be generated organically or from cash already in the business and therefore they experience greater independence.

So, what makes these companies tick?

According to the CSRI, family companies are run conservatively. As stated before, their investments are purchased through money that exists within the company. Therefore, they are less reliant on any debt.

This conservative nature suggests that growth and goals are set in the long term, not the short term. Profit made can then be invested back into the company for expansion and research, instead of it being returned to investors or paying back debt. This ‘personalisation’ of finance makes every penny matter.

How should you go about running a family-run business

Walden University has published an article that provides 8 tips that may help you to manage a family owned business successfully. We’ve selected the three which we think stand out as most important:

  1. Avoid family arguments by developing a professional relationship with each member that is distinct from the familial relationship. Communication within a business is vital, as both praise and criticism must be both given and received in a way to serve the business need. So, develop an open and professional relationship. To achieve this, create a divide between family time, and professional time. Make a concerted effort to leave work at the office.
  2. With businesses that go back a long way, for instance one that spans multiple generations, it is vital to continue to develop, especially with technology, even when there is resistance to do so. This problem is a prime example of when communication is key. You will need to negotiate and persuade across generations to enable the business to grow and thrive without losing the longevity of the roots. Remember, it is the very conservatism which makes family businesses a success, but this shouldn’t be at the expense of moving forward with the times.
  3. Finally, if it comes to it, don’t be afraid to hire from the outside. You cannot force every member of the family tree to join the business, nor can you always wait for a new member to be of age to take part. Make plans for the future, and always be on the lookout for talent. This prevents an insular approach and allows the business to benefit from a wider pool of skills, talent and experience.


If you run a family business, or have any thoughts or opinions, comment below and let us know what you think.