Family Enterprises: Supporting Main Street U.S.A.
DELAND, Fla., Jan. 13, 2011 /PRNewswire-USNewswire/ — Not long ago, Americans spent almost $1 trillion to bail out Wall Street, and almost everyone agreed it was necessary. However, says author and consultant Greg McCann, everyone from pundits and politicians to academics overlook a critical issue–the importance of family business to the American economy.
Bailouts and deregulation aim to help bolster Wall Street, says McCann, who specializes in working with family enterprises. Meanwhile, little attention and few resources go toward the likeliest solution to the country’s economic woes, the family firms that are ubiquitous.
“About 90% of all businesses in our country can be classified as family businesses –and those businesses will create almost 80 percent of the new jobs that will lead us out of the recession,” McCann says. “So aren’t we missing the boat?”
Family enterprises produce over half the U.S. gross domestic product (GDP) and employ more than half the country’s workforce. “And a growing body of research validates what solidly-performing family businesses, and their advisors have always known,” he adds. “When properly managed, family involvement in a business is a strategic advantage.”
A typical family business engages in longer-term thinking and uses capital more patiently than other businesses, he explains. A family firm is also likely to invest more in leader development, have much stronger ties to its community and be governed by people who are truly invested in the firm.
“This is the exact opposite of short-term-thinking debacles like the ‘credit default swaps’ that sucked up an unbelievable multiple of our nation’s GDP!” he says. “Isn’t a longer-term perspective what everyone–media pundits, educators and politicians say American business needs?”
Yet while the government spends big bucks on bailouts, family enterprises continue to work through the hurdles placed by government and struggle to be accurately portrayed by the media, McCann says.
“You have to wonder why the corporate and tax laws discredit a sector that’s not trying to maximize short-run profits at huge long-run risk,” he says. “Why aren’t we supporting these people who aspire to operate businesses where solid, prudent family business values drive the numbers?”
While the family’s involvement can be a firm’s greatest strategic advantage, he warns, it can also be its biggest risk factor. We need more family business owners to understand how to better manage the family’s involvement in the business yet there are relatively few sources of meaningful advice. Only a tiny fraction of business schools offer courses in family business, McCann says, and a relatively small percentage of business advisors knowledgeably incorporate the family factor into their advice.
“Other areas of the globe have advocacy groups for family enterprise,” he says. “Europe has had such an organization for a decade or more–Australia too.”
McCann applauds the recent founding of Family Enterprise USA, a non-profit membership organization formed to provide a collective voice for the roughly 5.5 million family enterprises in this country. Currently, they are recruiting committed family business owners to join the organization and assist in educating external audiences about the unique aspects of family businesses. “While it’s a tall task to get a group of this size to come together and speak from one voice, it’s definitely a step in the right direction,” he says.
“Once you understand how important and unique family enterprises are to our economy and our society and understand their potential, your priorities shift,” McCann says. “Imagine what could happen if everyone ‘got it!’”
Greg McCann, professor, consultant, family business owner, and author will be presenting concepts related to the above article at the Family Enterprise USA First Annual Member Meeting on Monday, February 28, 2011 in Naples, Florida on this topic. For more information on this event, visit www.familyenterpriseusa.org.
Media Contact: Greg McCann Phone: (386) 943-9235 Email: firstname.lastname@example.org
SOURCE Greg McCann, Family Enterprise Center at Stetson University