It’s said that family businesses are America’s economic engine. Considering that 80 to 90 percent of all U.S. businesses are family-owned or controlled, this is no exaggeration. The following statistics appear elsewhere in this issue, but they bear repeating:
- About 35 percent of Fortune 500 companies—and 60 percent of all public companies—are family-owned or controlled.
- Family businesses account for half of the entire U.S. gross domestic product and provide 65 percent of all wages paid.
- They generate 60 percent of the country’s employment and 78 percent of new job creation.
There are many advantages to running a family business—such as independence and flexibility—but respondents to a Mass Mutual survey suggest that owning a family business also leads to more stress (44%) and can mean that you never take a day off (39%). Personal errands on evenings and weekends are often entangled with business responsibilities, and striking a balance between work and family can be a difficult task.
Every family business has a story to tell. The chronicle of immigrants coming to this country to seek a better life is a quintessentially American one. Last September, we shared the stories of Otto Baum, James Demanes and M. Walter Lippmann, who settled in the Peoria area and started businesses which still bear their name. In this issue, we look at one of Peoria’s beloved institutions, Fred’s Shoe Repair, whose namesake, Fred Khattar, immigrated to the U.S. from Lebanon in 1957 to take advantage of this “land of opportunity.”
Family businesses tend to be thought of as “mom-and-pop” shops, yet some of the country’s largest businesses are family-controlled, including Cargill and Ford Motor Company. Haddad’s Market in West Peoria and Lindy’s Downtown Market in Washington show how a small family business can thrive in the face of competition from big-box chains—but even Wal-Mart itself is essentially a family business, with nearly 40 percent of its shares still held by the Walton family.
Just three percent of family businesses survive into the fourth generation—and their success is something to celebrate. This year, Illinois Mutual marks its centennial anniversary, with a fifth generation of family poised to lead the company into the future. Founded in 1860, Hagerty Brothers Company has survived 16 official economic recessions while maintaining family ownership for six generations, while the George J. Rothan Millwork Company, founded in 1873, is in its fifth generation of family ownership.
How to explain the resilience of the family business? The companies profiled in these pages have shown an ability to adapt to changing times. They treat their employees as family, and return again and again to the tried and true: good customer service, often with a personal touch, and involvement in the community. These are their stories, and we salute each of them. iBi