10 Basic Tenets for Successful Family Owned Agencies

The presence of family run businesses continues to play a major role in the U.S. economy. From rural mom and popyshops to international conglomerates, family businesses are at the foundation of our economy. Ford Motor Company, Walmart, Berkshire Hathaway, and Dell Technologies are just a few of the many U.S. family-run companies that have proven their ability to thrive and adapt to changing markets while maintaining their core values.

There are reportedly 5.5 million family-owned businesses in the U.S. who employ nearly 60% of the country’s labor force and contribute $8.3 trillion to the U.S. GDP, according to Family Enterprise USA (FEUSA), which advocates on behalf of family owned businesses. Family businesses are also responsible for 78% of all new job creation. (Astrachan. J.H. & Shanker, M.C.) This means family run companies employ over 98 million Americans!

Additionally, 35% of Fortune 500 companies are family controlled, according to Women & Wealth Magazine. Roughly 86% of U.S. family businesses expect to see growth for the next two years, the PwC 2023 US Family Business Survey found. These raw statistics exemplify the massive power that family businesses have in our local, state and global economies.

Women’s leadership roles in family business have evolved significantly over the last decade, as well. A 2019 study conducted by Successful Transgenerational Entrepreneurship Practices (STEP) revealed that 7% of North American family firms surveyed were led by women and 34% had women on their board. While those numbers may seem low, it is a step in the right direction for more growth and female-led businesses. According to Mass Mutual American Family Business Survey, “31.3% of family businesses indicate that their next successor is a female.”

This statistic shows promise for future generations of females who are looking to run a business. Although there is much more to accomplish, women continue to play a vital role in fueling economic growth in America via family businesses.

Family Business Basics

The secret to a successful family business is to treat it like a business, not as an extension of the family. There are many family run insurance agencies. The successful ones tend to incorporate the following 10 basic tenets.

Give family members responsibility and authority as they become ready for it. Don’t second guess their decisions within the parameters of authority you have granted. This is difficult to do with any employee and much more troublesome with family members, especially children.

Additionally, it is important to pay attention to any child that might resent all the time their parents spent with the agency instead of them. Aggressive behavior by a jilted child can be very destructive to the business. Rivalries between siblings can wreak havoc on an otherwise successful business. It is recommended that children who are not associated with the agency should not be owners.

Additionally, non-active owners might not appreciate what it takes to run the business or the day-to-day necessities. Assuming that there will always be someone else to handle business matters can become highly stressful when it ultimately proves unfounded.

The new motto needs to be “it’s nothing personal, it’s just business.”