While the term family business may bring to mind a small operation, the reality is in fact very different. Certainly “mom and pop shops” do exist, but some of the world’s largest and most successful companies are actually family owned businesses including Nike, Carnival Cruises, Volkswagen and even Walmart.
In the United States, there are approximately 5.5 million family businesses and these businesses contribute 57% towards the GDP and employ an impressive 63% of the workforce. Furthemore, family businesses generate 78% of new jobs.
As the statistics show, family owned businesses are flourishing, and for good reason. Many consumers simply prefer to do business with family owned companies and even more so, with family operated business. Here are three reasons why smart consumers are choosing with increasing frequency to skip over corporate owned companies and instead choose to do business with family.
It’s a Matter of Trust
A family business does not consist only of hired employees paid to do a job, but rather a group of people with an invested interest in the business. When it comes to a family business, it is about self-preservation – built into the culture of the company is the drive to stay in business and succeed. It is natural, then, that a family owned business will go to extensive measures to please their customers and to deliver a quality service or product.
The owner of family owned Full Bore Inc., which specializes in water main and sewer line installation and repair, articulates this concept, stating: “I will continue to show my customers the attention to details and customer service it took to build my business” and will make sure customers feel confident to refer the company to family or friends.
Consumers seek to work with companies and brands which reflect their own values. Sharing similar values or value system imparts a sense of comfort and trust. Family businesses have an advantage when it comes to delivering on core values because these companies are known for being built on values. Most family businesses originally were founded not only to make money but also to provide a genuine service or product of value. A strongly embedded value that the company prides itself on and which has become synonymous with the company’s identity over the years is likely to be passed on to the customer.
Accountability & Responsibility
Businesses that market themselves as family owned know that their name and reputation is directly dependant on the quality of their product or service. They will make great efforts to ensure that their name and reputation is not tarnished by delivering on what they promise their customers. In the event that something does not go right, there is usually a real person to turn to for help, and the business is usually more than willing to make amends in order to restore the customer’s trust, loyalty and satisfaction.