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Why family businesses are star performers
Family-owned firms are consistent star performers when it comes to sizeable, sustainable returns. We dig into the recipe for a multi-generational success story.
Why family businesses do better
Our research shows that companies owned by founding entrepreneurs or their families tend to do better. What's behind this star performance?
We looked at more than 1000 companies that are owned by the entrepreneurs that founded them or their families. What stood out is that this type of company tends to outperform the wider equity markets. This means that they are more likely to offer superior returns and growth than publicly owned companies.
While it's not easy to establish cause and effect, there are some clues as to why companies in family hands do so well.
- Higher spending on research and development: if investing in innovation is a high priority, the business will be in a strong position to adapt and grow with markets and trends
- Higher capital expenditure: businesses that spend money on improving equipment will be well-placed to keep their operations efficient and control costs.
- Less dividends and share buy-backs: by taking less out of the business, the company can commit to long-term investment.
- More long-term investment: thinking long-term gives companies more flexibility and makes them more sustainable.
Our report, the CS Family 1000, takes an in-depth look at what makes the family business model unique and analyses the top performing family or founder-owned businesses globally and by region.
Passing on the family business
Families must think through many issues during the wealth transition process, and not all of them are financial.
Wealth transfer specialist Bernard Fung highlights some of the common stumbling blocks for entrepreneurial families and outlines regional differences that are important to consider in the process.
Handing over the family business
While family-owned businesses are more financially successful than other companies, a change in generations is a common obstacle.Read more
What family business heirs need to get to grips with
A successful generational change is critical for the survival of the family business. But what can the next generation do to best prepare for taking the reins?Read more
The CS Family 1000Download our family business report This link target opens in a new window
Take a closer look at 1000 family businesses to find out the secret of their long-term success. Our analysis explores the factors that drive performance and reveals why family firms hold the key to sustainable growth.
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