Carnegie, Rockefeller and Vanderbilt. We have all heard the names before. What each of these men built, besides a company, was a legacy. Their interests, other than their families, varied from education, to art and music, to beauty.
These men are long gone, but their legacies remain. This is just one reason a family business is so important – it builds a legacy, not just for the family generations to come, but for all of us to eternity.
Statistics vary, but somewhere around 85 percent of all businesses in this country are, or started out as, family businesses. You can’t drive the streets of Milwaukee today without seeing a plumbing company called Joe Smith (fill in your choice of name) & Sons. Or the auto group with the family name listed prominently on the billboard. That is a significant amount of our nation’s gross national product, and thus, just another reason why family businesses matter – not only to the family, but to all of us. After all, those family businesses hire plenty of the rest of us and that fuels the economy and employment rates.
Another reason family businesses matter is because they are trustworthy. Most consumers report that they would rather go to a family business over any other type of business. The reason given is integrity. There is a perception that family businesses are simply more honest. Family business owners, it is thought, do not wish to sully their names with bad business practices. After all, when your name goes on the door, there is a different level of expectation that you have and you maintain a different level of care. It should be no surprise that many of the goods we hold in highest esteem are related to a family name – Prada, Gucci, Ford as examples.
Finally, family businesses have staying power. While it is true that passing a business on to the next generation is difficult, ever more difficult and less likely with each passing generation, those businesses that do survive have tremendous longevity – decades, if not centuries. They tend to be good citizens, giving back to the community from whence they came, and communities tend to reward one of their own. In Milwaukee in particular, this can run across ethnic and cultural lines, which helps to build the family name along with the business.
Still not convinced on the importance of a family firm? Next time you go to a restaurant, choose a food item in the grocery store or purchase an important item, note the likelihood that this item comes from a family business. I like my Sargento cheese served with Gardetto’s, while waiting for the grill to cook up my Usinger’s hot dogs, all while sitting on my Steinhafel’s sofa.
Have I made my point? And, I like those dogs wrapped with Patrick Cudahy bacon!
-Dr. David Borst is executive director and chief operating officer of the Family Business Legacy Institute, a hub for all things family business related. He can be heard every Saturday at 6:20 a.m. on WTMJ radio’s “All Business.”
