Even in a trying economy, most family business owners expect to flourish.

The family-owned businesses we surveyed have had much success over the last three years, and despite a challenging economy, most of these business owners expect that success to continue. In fact, none of the family businesses surveyed expect the number of employees to decrease at their firm over the next year. This finding supports other studies that also found family businesses typically resist downsizing.⁴ Positive expectations extend beyond 2009, as more than half of those owners expressed they were highly confident in their company’s growth over the next five years.

Family businesses have a positive outlook and believe they are outperforming their nonfamily-owned counterparts. There are many factors that may promote this outlook. Studies have shown that family businesses are not as leveraged as publicly held firms,⁵ which would likely make them less vulnerable to the credit crisis. Most are privately held and typically don’t report quarterly earnings to shareholders which allows them to take a long-term view of their businesses. Last year’s national survey, Laird Norton Tyee Family Business Survey: Family to Family 2007, also found that family businesses across the country felt good about their long-term growth, with 87 percent of those surveyed saying they were "highly optimistic" about their company’s prospects over the next five years.

"Family businesses disprove the great myth that multinationals dominate the economy. As big business continues its quest for efficiency, the services, capacity and expertise of family businesses across all industries will become even more important." – Don Brunell, President, Association of Washington Business

That confidence may be built largely upon the successes these family-owned businesses have had in the past. Over the last three years, the average, annual, after-tax profit as a percentage of sales for family-owned businesses surveyed was 6.8 percent while average sales growth was 33.4 percent. More than 80 percent believe they have a high sales growth rate compared to their competitors. As with any survey, this is a snapshot in time. It is important to note that this survey was conducted in the spring of 2008 at a time when many negative economic factors had started to take hold but before their impact could have been accurately measured.

⁴Astrachan, J.H., Zahra, S.A., & Sharma, P. (2003). Family-Sponsored Ventures. Presented in New York on 29 April 2003 at the First Annual Global Entrepreneurship Symposium: The Entrepreneurial Advantage of Nations
⁵Miller, Danny and Le Breton-Miller, Isabelle. Managing for the Long Run (Boston: Harvard University Press, 2005), p.19.

Laird Norton Tyee Family Business Survey 2008
© 2008 Laird Norton Tyee