A fairly recent study by Oregon State University shows that building up the fact that your small business is “family” owned will positively influence the buying decisions of customers or prospective ones. As the backbone to the U.S. economy, family owned and operated businesses contribute to more than 50% of America’s gross domestic product and account for 78% of new jobs.
In fact, an estimated 80% of the 15 million U.S. businesses are family owned.
Family owned businesses leave most of us with a sense of quality and wholesome values… something solid, lasting, that we can trust. After all, everyone has a family… and it’s this familiarity that helps to make buyers comfortable and more willing to patronize a family owned concern. Rather than a faceless, soulless corporate entity, a family business carries the power of a name and reputation that gives the customer (or a prospective one) a greater sense of value.
This very natural inclination has been confirmedby the OSU survey of nearly 400 business leaders nationwide. ”There is a positive relationship when businesses brand themselves as family businesses to financial performance,” according to Clay Dibrell, associate professor of strategic management in the College of Business at OSU.
Family owned businesses also tend to put more of a priority on community service, and this translates to a perception of greater value. Communicating pride in family and community involvement gives these businesses a distinct competitive advantage. Examples of successful family owned businesses, who still cling to their family roots include SC Johnson, E & J Gallo Wines and Columbia Sportswear.
To learn more, take a look at the most discussion of the research in the June 2008 issue of the Journal of Small Business Management.
