In the US the family-owned enterprise seems to be the poor relation of the business world. Entrepreneurs such as Jeff Bezos, the founder of Amazon, and Mark Zuckerberg, who founded Facebook, are household names. Becoming an entrepreneur is the fashionable route that many want to travel.
As a result, business schools are geared up to teach students how to launch their own companies. The ethos is that entrepreneurs, not families, create jobs.
“I would say culturally, in the US, we put the entrepreneur on a pedestal,” explains Andrew Keyt, executive director of the Family Business Center at the Quinlan School of Business at Loyola Unversity Chicago. He is also president of the North American branch of the Family Business Network.
Mr Keyt says the US romanticisation of the entrepreneur could be contrasted with how the media has treated stories of family businesses.
“I think our media just loves to tell the stories of family fights . . . rarely do you hear the stories of family success,” he says.
But many family business experts think that the emphasis on entrepreneurs could be misplaced.
“We have research in the United States that shows that 77 per cent of new ventures start as family businesses and another 3 per cent become family businesses within two years of being established,” says Pramodita Sharma, global director for the Successful Transgenerational Entrepreneurship Practices (Step) project at Babson and professor of family business at the University of Vermont School of Business Administration
The secret of this large percentage is in the small print. The researchers, she says, included any company in which family members have made significant contributions in terms of finance, human capital and social networks. With the net cast more widely, more entrepreneurs suddenly looked suspiciously like a family business.
Greg McCann, founder and director of Stetson University’s Family Enterprise Center, also thinks such businesses have an image problem in America.
“In the US everyone wants to identify themselves as an entrepreneur,” he says, adding that it is almost as if people want to say: “We’re not a family business, we like to do things properly.”
Mr McCann says the current image of a family business in the US is a serious drawback because of the large numbers of companies involved.
“Especially in the US, families are managing their businesses alone. The best numbers we have are that two out of three businesses fail – what if we helped them?” he asks.
Most experts agree that crucial to further development of advice and education for such enterprises is further research.
Some experts are beginning to look beyond the high rates of business closures and view them not as failures but as cashing in on a successful entrepreneurship or young family business.
For example, David Robinson, professor of finance at Duke University’s Fuqua School of Business, thinks the headline statistics may be misleading. Many companies that go out of business are sold rather than going bankrupt, he says.
“Research shows that if your parents were entrepreneurs you’re more likely to want to be an entrepreneur yourself,” says Prof Robinson.
He says US parents are understanding of children wanting to pursue their own path and might be prepared to sell their company to raise money for their offspring to start a business.
Ann Kinkade, who founded the lobbying group Family Enterprise USA about five years ago and now runs her own family business consultancy, Lucid Legacy, agrees. “Entrepreneurship is part of our culture,” she says. “What happens in the US is that we think of supporting the next generation in what they want to do.”